HRMC changes to Etsy, Vinted and eBay tax on sales that you need to know about. Discover the new rules about tax on side hustles in the UK.
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New Changes to Vinted, Etsy, eBay Tax on Sales You Need to Know About
Online selling platforms such as Vinted, Airbnb, eBay, and Etsy have become a valuable source of side income for many in the UK. But savvy side hustlers may now see their extra income subject to tax payments under the new 2024 HRMC rules.
- Platforms like eBay, Vinted, and Etsy track & report your sales to HMRC starting January 1st.
- This applies to both goods & services: handmade, second-hand, rentals, delivery, etc.
- Thresholds are £1,000/year for self-assessment and €2,000/30 items for platform reporting.
- If your earnings are below £1,000: there will be no automatic reporting (but keep records!).
What Are the New Tax Rules for Online Selling Sites?
From January 1st 2024, online selling giants such as eBay, Vinted, Depop, Airbnb, and Etsy will collect and then share seller transactions with the HRMC.
How Are the New HRMC eBay Rules Different?
Previously, the HRMC was already able to request transaction information from online seller platforms based in the UK. But from the new year, the new UK agreement through the OECD (Organisation for Economic Cooperation and Development) will see this sharing extended to non-UK platforms.
This is part of an ongoing global initiative to identify and clamp down on online tax dodgers.
How Will Things Work Under the New eBay Tax on Sales Rules?
Following the new guidelines, online selling platforms will regularly report sellers’ income to the HRMC. This applies to sales of a wide variety of goods, including handmade and second-hand items. It will also apply to online service selling, such as short-term accommodation, driving services, and food deliveries.
What is the Threshold for Tax on eBay Sales and other Online Side Hustles?
The current threshold for your earnings from online side shuttles stands at £1,000 per year. If you make more than this, then you need to register as self-employed, keep financial records, and then submit aself-assessment returnto cover your financial year.
Self Assessment for Tax Return – Your Ultimate Beginner’s Guide.
What if You Only Sell a Few Items Online Here and There?
Are you selling a few items here and there? Relax; your data won’t be automatically shared with HMRC. The data sharing applies only to those who sell 30 items or more per year AND earn over €2,000 (around £1,700) annually.
However, remember that regardless of automatic reporting,earnings exceeding £1,000 from online sales might still be taxable.
How Many Sellers Will Be Affected by the New Online Selling Tax Rules?
If you currently don’t make above £1,000 a year in sales, then you don’t need to worry right now. In astatement to the BBC, Vinted’s chief executive, Adam Jay, reassured the site’s sellers.
“It’s actually quite a small proportion of users of our platform who will trigger this threshold where we need to provide information…only those people who are making a profit from selling second-hand items that might be eligible for tax and then it’s about their own personal tax situation what tax would ultimately be due to HMRC.”
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What Does the HRMC Have to Say Abou the New eBay, Vinted and Etsy Tax on Sales Rules?
In a statement regarding the new rules, HRMC stated: “These new rules will support our work to help online sellers get their tax right first time. They will also help us detect any deliberate non-compliance, ensuring a level playing field for all taxpayers.”
New eBay tax Rules – Your Next Steps
So, what are your next steps as an online seller? Here are some essential tips to keep in mind regarding the new HRMC online sales rules.
- Income below £1,000? Filing may not be required, but keep records just in case. HMRC might request them later.
- Starting January 2025, online platforms will automatically report seller information to HMRC. No more manual reporting!
- Proactive tax declaration is vital! If you owe tax, avoid potential penalties by declaring it upfront. Don’t wait for HMRC to come knocking.
Disclaimer: The content on this page and websiteis for informational purposes only and does not constitute professional financial advice. You should always do your own research and consult experts, if necessary, before committing to any financial decision.
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