Mark McLaughlin looks at the tax position for those selling personal possessions, or buying and selling items, using online platforms.
Once upon a time, many people periodically emptied their loft full of old belongings they no longer needed and sold them at a local car boot sale to make extra cash. Nowadays, online platforms like eBay, Vinted and Gumtree have largely replaced car boot sales in the popularity stakes.
How do they know?
For some, selling items online is a regular occurrence. This has attracted the attention of HM Revenue and Customs (HMRC). Early in 2025, HMRC sent out a letter to individuals identified as having failed to declare income from online marketplace sales up to and including the tax year 2022/23.
Operators of online marketplace platforms are required to report details to HMRC about sellers of goods or services on those platforms (SI 2023/817), subject to certain conditions and exceptions. This reporting requirement applies to (among others) sellers making 30 or more sales of goods, and receiving at least 2,000 euros (i.e., around £1,700) for those sales in a year (www.gov.uk/guidance/reporting-rules-for-digital-platforms).
HMRC will probably check disclosed details against the tax records of reported sellers and contact those individuals to establish whether there is an undeclared tax liability.
It’s not taxable…is it?
The fact that income has been received from online marketplaces does not necessarily mean that tax is payable.
HMRC guidance (www.gov.uk/guidance/check-if-you-need-to-tell-hmrc-about-your-income-from-online-platforms) states: ‘Personal possessions are items that belong to you for your own use. You may have bought them or received them as a gift…if you’re selling personal possessions you probably do not have to pay income tax on these.’ (NB capital gains tax (CGT) may be due on the sale of a ‘chattel’, or a collection or set of items, if the sale proceeds exceed £6,000; the CGT rules are not considered here).
However, HMRC also considers that an individual who buys or makes goods to sell at a profit is likely to be trading. Whilst that may be true, it doesn’t necessarily follow that tax will be payable.
As indicated in my Business Tax Insider article for July 2025 (‘Do the hustle!’), a ‘trading allowance’ is available to shelter trading, casual or miscellaneous income of up to £1,000 per tax year from income tax. Even if this £1,000 threshold is exceeded, there may still be no tax payable if allowable trading expenses exceeded income, or if the individual’s personal allowance (£12,570 for 2025/26) is available and covers their taxable income.
Anything to declare?
HMRC’s guidance on self-assessment tax returns (www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return) states: ‘You must send a tax return if, in the last tax year…you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)’. This is notwithstanding that there may be no actual tax liability, for reasons such as those explained above.
The difficulty for many individuals is they don’t realise that their selling of goods online could make them ‘self-employed as a ‘sole trader’ as far as HMRC is concerned. Establishing whether someone is self-employed is a multi-factorial test, depending on the particular circumstances. It is possible to arrive at an incorrect conclusion (or at least a different answer to HMRC!), which could result in tax, interest and penalties – professional advice is highly recommended.
Practical tip
Individuals who receive a ‘nudge’ letter from HMRC should not ignore it but take action as soon as possible – even if they don’t consider they have anything to declare.
