HMRC now receives information directly from online platforms about what people earn through them. If you sell goods, offer services or let property through a website or app, HMRC may already know about it. Income above the £1,000 allowances generally needs to be declared, and if it has not been, it is better to tell HMRC before it contacts you.
Selling your own unwanted belongings is usually not taxable. Buying to resell, making things to sell, or providing a service for payment usually is.
What the platforms report
Since January 2024, digital platforms such as eBay, Vinted, Etsy and Airbnb must collect details of sellers and report their income to HMRC. A seller is reported if they make 30 or more sales, or receive about £1,700 (EUR 2,000) or more, in a calendar year.
Being reported does not mean tax is due. Someone clearing out a loft could easily make 30 sales. It does mean HMRC can compare platform data with tax returns and follow up where something does not match.
Is it trading?
The key question is whether you are trading. Signs that you are include:
- buying items with the intention of selling them at a profit
- making goods to sell
- selling regularly, in a way that looks like a business
- providing services, such as tutoring, crafts, photography or delivery work
Occasional sales of personal possessions, usually for less than you paid, are not trading. Letting property, including short lets through Airbnb, is taxable as property income rather than trading.
The £1,000 allowances
There are two separate allowances, each worth £1,000 a year:
- Trading allowance: if your gross trading income is £1,000 or less, you do not need to declare it.
- Property allowance: the same applies to gross property income of £1,000 or less.
Above £1,000, you can either deduct your actual expenses or deduct the £1,000 allowance instead, whichever is better. Letting a room in your own home may also qualify for rent-a-room relief.
A worked example
A part-time employee sells handmade jewellery on Etsy. In the year to 5 April 2027, sales are £4,800 and materials, fees and postage cost £1,900. Her profit is £2,900.
Deducting actual costs is better than using the £1,000 allowance. Her salary already uses her personal allowance, so she pays 20 percent tax on the profit, which is £580.
She must register for self assessment by 5 October 2027 and file her return and pay by 31 January 2028.
If HMRC writes to you
HMRC runs campaigns and sends nudge letters to people it believes may have undeclared income. A letter usually asks you to check your position and either confirm all is in order or make a disclosure.
Do not ignore it. If the income was not taxable, for example because you were selling personal items or were under the allowances, reply and explain. If tax is due, act promptly.
Putting it right
Undeclared income from earlier years can be disclosed through HMRC's Digital Disclosure Service. You notify HMRC, then have a set period to calculate and pay the tax, interest and any penalty.
Penalties are generally much lower when a disclosure is unprompted than when HMRC finds the problem first. Interest runs from the original due date, at Bank of England base rate plus 4 percent, so delay costs money.
Larger side businesses should also watch Making Tax Digital for Income Tax. Sole traders and landlords with qualifying income over £30,000 will need to keep digital records and send quarterly updates from April 2027.
What to do
- Total your income from each platform and side activity for each tax year.
- Decide whether it is trading, property income or simply personal sales.
- Keep records of costs, so you can compare them with the £1,000 allowance.
- Register for self assessment by 5 October after the tax year if you need to.
- If earlier years were missed, consider a voluntary disclosure before HMRC writes.
If you would like help working out whether you owe anything, book a free call.
