You’ve had a clear-out. You’ve listed a few bags, some old trainers, a coat you never wore. The money is coming in. And then a thought creeps in.
Do I owe HMRC a share of this?
It’s a reasonable question. And the honest answer is: it depends on what you’re selling and why.
Here’s how to think it through.
Selling your own stuff is not the same as trading
HMRC draws a clear line between two different types of selling.
The first is selling personal possessions — things you bought for your own use and are now getting rid of. Old clothes, shoes, furniture, gadgets. If that sounds like you, you probably don’t owe any income tax on those sales, no matter how many items you list. (HMRC — Check if you need to tell HMRC about your income from online platforms)
The second is trading — buying items with the intention of selling them for a profit. If you’ve started buying bundles at car boot sales, sourcing stock from charity shops, or purchasing wholesale to resell, that’s a different picture.
The £1,000 trading allowance
If you are trading, there’s some breathing room. Every individual in the UK gets a tax-free trading allowance of £1,000 per tax year. A tax year runs from 6 April to 5 April the following year. If your total trading income stays below £1,000 before expenses, you don’t need to tell HMRC about it. (HMRC — Check if you need to tell HMRC about your income from online platforms)
One important detail: that £1,000 applies across all your trading activities combined. So if you’re selling on Vinted and also doing a bit of Etsy, the income from both counts together.
HMRC can now see your sales data
This is worth knowing. Since January 2024, online platforms — including Vinted — are required to collect information on sellers and report it to HMRC. Platforms report sellers who earn above certain thresholds or sell a certain volume of items. (HMRC — Selling online and paying taxes information sheet)
This doesn’t mean you automatically owe tax. What it does mean is that HMRC has greater visibility of online selling activity than it once did. Staying on the right side of the rules is straightforward when you understand them.
Not sure where you stand?
HMRC has a free online tool you can use to check whether you need to declare your income. It takes a few minutes and nothing you enter is stored. (HMRC — Check if you need to tell HMRC about your income from online platforms)
Give it a go. It’s designed for exactly the situation you’re in.
If you earn more than the £1,000 allowance from trading, the next step is registering for Self Assessment. We’ll cover that in another post. For now, the key question is simple: are you clearing clutter, or are you buying to sell? Your answer shapes everything.
Use our free UK side hustle tax calculator to see exactly how much tax you’d owe on your Vinted income.