Ebay and Vinted nothing new here for tax !! But does VAT come into it and beware of the new MTD regulations – So beware of letters from HMRC on your side hustle income and be prepared to justify your figures!

It has been put out in the public domain by HMRC through their own Facebook page and in the press, that they are out to catch people for making a profit from a little business on the side. And a lot of the information circulating by word-of-mouth for people selling their unwanted clothes children’s toys et cetera can be quite scary but making a profit from a business, however small, has always been taxable to income tax. There is no new form of tax for online selling. It is just that HMRC now have the tools to flush this out, which may be viewed as underhanded!.

What has changed is the way that the various online platforms that people use to sell goods and services, are now obliged to report information to HM Revenue and Customs. It must be an onerous job for them and one they probably didn’t ever expect to do.

Digital platforms must now since 2024 share sales data and some personal information with HMRC. If you have sold at least 30 items or earned roughly £1,700  using platforms like eBay or Vinted, you are one of those to be reported on and HMRC will be sitting on your name and address at least.

If you use paid-for service such as a Airbnb likewise your platform provider will tell you that your information has been shared with HMRC. We are seeing a lot of cases coming our way where HMRC are fully aware of people operating through Airbnb and other similar property letting platforms and the information they hold is extensive and accurate.

The result of these platforms passing sales information to HMRC does not automatically mean you need to complete a tax return, but you should now seriously consider looking through your records and bank statements to see exactly what costs you’ve incurred and what income has gone into your account after the platforms have taken their commission. If your gross income before commission exceeds the VAT threshold then you will certainly need an accountant and need also to consider the new making tax digital regulations – MTD. So at the very least you may need to register for Self Assessment and pay tax, if you:

• buy goods for resale or make goods with the intention of selling them for a profit
• offer a service through a digital platform
• Let out a property through a website
• Operate as a delivery driver or a ‘man with van’ service through an online platform, for example
• AND generate a total income from trading or providing services online of more than £1,000 before deducting expenses in any tax year

If you think you may be in the frame for a tax charge and want to discuss it or make a voluntary disclosure before HMRC contact you please drop us a line on email or call and we can answer your questions:-

Call Andy on 07879 464577

Alex on 07538 418839

Lindsay on 07584 706664

Or email her on Lindsay@lhtax.co.uk