Anyone who dabbles in online sales through eBay and Vinted need to keep an eye on their post this month, as HMRC will be sending out letters by the end of January. Due to new rules implemented at the start of the year, big digital marketplaces such as Ebay, Vinted and Depop now have to report certain information concerning their sellers’ revenues to HMRC.
Sellers will be notified if a platform is sharing their financial information, with a deadline for sharing this information with HMRC set at January 31. HMRC clarifies: “The information is meant to help you to keep track of your earnings. It might also help if you need to tell HMRC about your income or send a tax return. These reports do not replace your normal business records or tax calculations.”
But it’s not just a heads-up for sellers – they’ll get a breakdown of their total takings from each platform as well. The imminent communications from HMRC will outline how much tax platforms like eBay or Vinted may have already deducted.
Vinted has started sending sellers’ financial reports to HMRC
(Image: NurPhoto via Getty Images)
However, it’s not a blanket approach; only those surpassing a certain selling threshold will find these letters in their mailboxes. Government guidance further advises: “The report will show you the total amount that you have earned on the platform for the calendar year, less any fees, commission or taxes deducted by the platform. The amounts will be broken down into quarters of the calendar year. You’ll need to consider the types of taxes the platform has deducted to see if you can offset these against any tax due.”
The Manchester Evening News has reported some crucial information for thrifty individuals aiming to make a bit of cash from selling their unwanted items. According to HMRC, if you’ve made over 30 sales in a single year or have raked in more than £1,700, expect a little nudge from the taxman.
But don’t fret just yet; not everyone who hits these milestones is due to pay up on their earnings. The tax office provides some clarity, saying: “You’re unlikely to pay tax if you sell personal items from your home, like contents of a loft or garage. If you buy or make goods to sell at a profit, you’re likely to be trading and will have to pay tax on your profits.”
The list of personal belongings typically seen as exempt includes things like clothing, ornaments, kitchenware, furniture, jewellery, computers, and phones—any items you may have bought for yourself or received as presents, explained Birmingham Live.
On the other hand, should these items have been originally purchased with an eye to sell them on for more, or if they were crafted by your own hands, then you might just be stepping into trading territory. Profits in this case could be subject to income tax. To find out whether it’s time to have a chat with HMRC about your extra earnings, check out the advice on the gov U.K. website here.
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