Vinted and Ebay – the tax investigations continue! Check out the ‘BADGES OF TRADE’ 

We are aware that people are being brought into the tax net from selling goods through online platforms such as Vinted and eBay and this seems to be the latest campaign HMRC are launching at the beginning of 2025. 

HMRC have even posted on their Facebook page details of how to check whether you are trading or merely selling your own goods as a hobby or way of clearing out your old gear! 

The upshot is that hobby is not a word normally found in Hmrc’s vocabulary!!

They deem profit from the sale of any goods as trading, but there are what they call badges of trade to be considered before you capitulate if you have received a letter from them.

Here in simple form are the badges of trade to be considered:-

First look at what HMRC say on their online guidance below – 

1. An intention to make a profit supports trading, but by itself is not conclusive.
2. The number of transactions involved is a relevant point
3. The nature of the assets are important
4. The existence of similar trade to the side hustle is also relevant – Like a Trader selling off old or similar stock online.
5. Have any changes been made to the asset
6. The way the sale was carried out
7. The source of finance – have you taken out loans etc to fund it
8. Interval of time between purchase and sale – regularity or one-offs!
9. Method of acquisition – do you purchase goods for re-sale
10. Systematic and repeated transactions will support a ‘trade’ definition.

To be fair, HMRC is not likely to write to you if you have only been selling small numbers of quite obvious personal gods on an irregular basis. 

They have indicated that if you are selling more than 30 or 40 items on say  ‘Vinted’, they may write to you or if you have sold goods for over say £1700,  however there will be bigger fish to fry and they are likely to go for the larger cases first. 

Like the dog breeders we first saw HMRC picking up people selling large amounts of puppies regularly —  but once these had been swept up by them, they then started writing to people who had had maybe only one or two litters of puppies from clearly their own family pet. 

Therefore, beware!  If you have any worries at all about whether you would be caught in the tax net for your online dealings, contact us immediately. We will talk you through it and if necessary tell you the quickest way of settling it with HMRC as there is a quick and relatively painless way of making a voluntary disclosure to them and if you get this voluntary disclosure into HMRC before they write to you, you can benefit from much reduced penalty charges. Don’t wait for that letter to call us as there is nothing to lose.

 For a fixed price from us Call Andy on 07879 464577  or Lindsay on 07584706664