Martin Lewis said you will only have your information passed on if you’re selling 30 or more items a year or have made over the equivalent of €2,000 (around £1,700)
Martin Lewis has explained how new tax reporting rules for eBay, Vinted and other selling platforms work ahead of the self-assessment deadline.
These websites now have to report earned income to HMRC if you make over a certain allowance. Previously, HMRC had to request access to this information. However, not everyone will automatically have their details shared. Speaking during his Martin Lewis Money Show Live broadcast on ITV this evening, Martin said you will only have your information passed on if you’re selling 30 or more items a year or have made over the equivalent of €2,000 (around £1,700).
You may have to pay tax if you earn £1,000 in one tax year from selling – this is known as your Trading Allowance. If you make more than this, then it most likely has to be reported to HMRC through self-assessment and you may need to pay tax. You don’t have to declare additional income if it comes to under £1,000.
However, if you’re just selling your unwanted belongings, then you’re unlikely to be liable to pay tax – only those who are considered to be “trading” will likely need to pay tax – so for example, if you’re buying goods with the intention of selling them on for profit. You can check the HMRC website for guidance.
Martin Lewis said: “The tax rules have not changed. Tax is only due for those who are traders. That is people who are deliberately buying stuff in order to sell it for a profit, or building and repairing it in order to sell it for a profit, not [my producer] Alex, who was telling me she cleared out a wardrobe and was worried.
“You cleared out your wardrobe. It’s your stuff. You didn’t buy it for profit. You’re absolutely fine. Now if you are trading selling for profit, you can sell a maximum £1,000 a year stock including platform fees. Above that, you are and have always been eligible to pay tax.”
If you already report your additional income to HMRC, then the new rules won’t affect you as you’re already sharing your extra earnings. It will affect people who are not doing this or under-reporting their earnings. If you do need to pay tax, this normally has to be done through self-assessment.
The deadline to file your tax return for the 2023/24 tax year is January 31 – miss this deadline, and you’ll be slapped with a £100 fine from HMRC, even if you have no tax to pay. This increases to fines of £10 a day, up to a maximum of £900, if you still haven’t filed after three months – then after six months, you’re charged 5% of tax owed or £300, whichever is greater. This is then repeated again after 12 months.
