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Daily Mail
13 hours ago
- Business
- Daily Mail
Can HMRC see how much I sell on Vinted and Ebay? Tax expert issues warning
Individuals who sell secondhand items online are at risk of being investigated and fined by HMRC, a tax expert has warned. Under new rules implemented earlier this year, online selling platforms are now automatically reporting information about users and their selling habits to the taxman. It has begun to send 'nudge letters' to sellers who fail to pay tax on their earnings and an expert says some casual sellers trying to beat the rising cost of living are at risk of large fines. Lee Murphy, managing director of The Accountancy Partnership, says the letters are not just a scare tactic. He adds: 'Ignoring them may lead to full tax inquiries and criminal investigations.' What to do if you receive a letter from HMRC Online sellers who receive letters from HMRC have just 30 days to either declare their income or contact HMRC. While the letters show the Government is cracking down on sellers, the rules have not changed and remains a grey area. Anyone who earns less than £1,000 for selling online within a tax year, does not have to pay tax or declare their income. This is because of the Trading Allowance. But if you earn £1 more above that allowance, you'll need to notify HMRC. However, if you're selling secondhand goods like old clothes and books after a clear out, you're unlikely to be stung by tax. This is because you need to be classed as a 'trader' to have these goods included within the allowance. This will depend on how regularly you sell, what you sell and whether you're making a profit. 'If you do, however, earn over £1,000 from your side hustle each year, or you exceed 30 sales within one year, then you must let HMRC know about this to avoid getting any fines or being under any sort of criminal investigation,' says Murphy. 'If you're unsure how many items you've sold or how much money you've made so far, then it's best to go back and find your detailed sale records. 'Also keep track of any expenses that've gone with the sales; stamps, postage materials and courier payments, as you could get some of this back when the time comes to doing your Self-Assessment tax form.' How the rules are changing for online sellers The current rules might seem arduous, especially for online sellers who might sell more than 30 items but not breach the Trading Allowance. However, HMRC will raise the reporting threshold from £1,000 to £3,000 by the end of 2029. Sellers will still need to pay tax on anything earned over £1,000, but instead of filing a tax return, those earning money from side hustles will have to either pay via a simple tax bill or possibly through their PAYE tax code. HMRC said the changes would mean up to 300,000 people will no longer need to file a self-assessment tax return, including those who sell on Vinted and Ebay.
Wales Online
a day ago
- Business
- Wales Online
HMRC warning to anyone who uses Vinted to sell clothes
HMRC warning to anyone who uses Vinted to sell clothes As more UK residents look to the likes of Etsy and Vinted to make some extra cash tax professionals are raising the alarm If you've been selling clothes or other bits on Vinted, eBay, or Etsy, HMRC is warning that they're now keeping a much closer eye on what you're earning. The tax office has put £40m into new resources to track down people avoiding tax and they're able to see more information from these selling platforms than ever before. Since January sites like Vinted have had to share data with HMRC if a seller makes more than 30 sales a year or if their total sales go over £1,700 in 12 months. That means if you're regularly selling, even just as a side hustle, your information could already be in HMRC's hands. Lee Murphy, who runs The Accountancy Partnership, said HMRC uses this data to check against people's tax records. For money-saving tips sign up to our Money newsletter here According to Lee if you're over the £1,000 trading allowance and haven't told them you might get a letter reminding you to file a tax return. If you ignore it you could be looking at a bigger investigation or even criminal action. Article continues below The good news is that if you're just selling your own old clothes or one-off items you're probably not at risk. HMRC is more interested in people making consistent sales and turning it into a proper business. But if you've gone over the £1,000 allowance or hit more than 30 sales in a year then you do need to declare it. Lee advised checking your sales history and keeping records of everything you've made plus any expenses like postage or packaging. Those costs can be deducted when you do your self-assessment, which could save you money. It's safe to say that it's better to stay on top of things now than get caught out later. HMRC isn't just bluffing with these warning letters and the fines can end up being bigger than the profit you made. If you're unsure how much tax you might owe there are free online calculators that can give you an idea of what you'd have to pay like this one at The Accountancy Partnership. Staying organised with your records is the safest way to avoid trouble and it'll give you peace of mind if HMRC ever does come calling. Article continues below
