As more UK residents look to the likes of eBay, Etsy and Vinted to make room in their wardrobes this year, tax professionals are raising the alarm.
HMRC now has visibility into online selling activity, and non-compliance could lead to in-depth investigations or large fines that exceed your earnings.
On Vinted, particularly, reporting thresholds were tightened, and users who either do 30 sales per year or exceed £1,700 of gross sales over 365 days must now have their data reported with HMRC.
Lee Murphy, Managing Director of The Accountancy Partnership, who specialises in tax returns for Amazon and eBay, discusses how HMRC could detect and act on your side hustle: “HMRC uses the platform, whether this is Etsy, Vinted or even eBay, to match against each individual’s tax return.
“Those who’ve exceeded an annual trading allowance of £1,000 and also fail to declare this may receive reminder letters to ensure that they get their tax return done.
“While you may think this is just a scare tactic, ignoring these types of letters may lead to further full tax inquiries and criminal investigations.”
If you’re unsure of how many items you’ve sold or how much money you’ve made so far, then it’s best to go back and find your detailed sale records.
“If you are selling unwanted personal items and not making repeat trades or dropshipping, then you’re unlikely to face HMRC scrutiny,” he says.
“If you do, however, earn over £1,000 from your side hustle each year, you must let HMRC know about this to avoid getting any fines or being under any sort of criminal investigation.
“Also keep track of any expenses that’ve gone with the sales; stamps, postage materials and courier payments, as you could get some of this back when the time comes to doing your self-assessment tax form.”
Why most SHOULDN’T worry that eBay, Etsy, AirBnB etc must now share your sales data with HMRC, a speedy briefing…
Courtesy @itvMLshow pic.twitter.com/ilPw1pCgXw
— Martin Lewis (@MartinSLewis) February 3, 2025
What to do if you need to complete a self-assessment tax return this month
The deadline is looming, and it’s wise to start early, says Alastair Douglas, TotallyMoney CEO.
He urges taxpayers to act now to avoid long waiting times on hold to HMRC: “Millions of taxpayers will need to complete their self-assessment returns before the end of the month. And, as we edge closer to the deadline, more, and more people will be picking up the phone to call the HMRC helpdesk.
“Lines are likely to be at their busiest nearer to the end of the month, and during the middle and latter parts of the day. So, if you need help with your return, it’s best to get it sooner, rather than later.
“Cracking on with your tax return might not only save you time, but also money. That’s because the taxman will start handing out £100 fines to anybody who files their return up to three months late and will charge a late payment interest rate of 7.75% per year.”
Anyone who needs to file a tax return and doesn’t do so by January 31 can be fined £100.
This increases to fines of £10 a day after three months, up to a maximum of £900. After six months, you’re charged 5% of tax owed or £300, whichever is greater – this is then repeated again after 12 months.
You must also pay any tax due by 31 January, or you’ll accrue interest on any late tax payments.
After 30 days you’ll then also be fined an extra 5% of the unpaid tax, with this being repeated at six months and 12 months.
If you’re struggling to pay your tax bill and you owe less than £30,000, you may be able to set up a payment plan with HMRC, known as Time to Pay.
