"I use EBay/AirBnB/Vinted to sell: Do I need to declare my income?"
HMRC Crackdown on undeclared trading income
You may have heard in the news that HMRC are going to be cracking down on people that earn income from digital platforms.
If you are earning income from online sales (ebay, Vinted, Etsy), including using AirBnB to rent out a property, then you might need to declare your earnings by completing a self-assessment.
The facts below should help you to better understand whether you this requirement applies to you.
HMRC says, “If you are just selling some unwanted items that have been laying around your home, such as the contents of a loft or garage, it is unlikely that you will have to pay tax.”However, “If you buy goods for resale, or make goods with the intention of selling them for a profit, then you are likely to be trading and will have to pay tax on your profits.”
If you sell a possession for over £6,000 then you have to pay capital gains tax.
If you make less than £1,000 per year by re-selling online and don’t usually complete a self-assessment, you probably don’t need to worry, due to the £1,000 trading allowance, introduced in 2017. However, if you cannot use the allowances, or you already declare your income via self-assessment you do need to include your earnings made this way, even if they are lower than £1,000 per annum.
If you make more than £1,000 per year, you need to declare it to HMRC by completing a self-assessment.
All digital platforms are now obliged to share income data with HMRC. Before, they were not obliged if they were based abroad, but this has changed since HMRC joined OECD. This means that if you don’t declare your earnings above £1,000 per year yourself, HMRC will find out and you could face a fine and/or criminal proceedings.
The law regarding online earnings has not changed and there isn’t a new tax. This law was in place before, but now HMRC is going to be cracking down on this type of tax evasion.
You have until January 31st 2024 to submit your self-assessment for tax year 2022-2023.
If you have any further questions, or need help completing your self-assessment, get in touch: email us at hello@littlehouseaccountants.co.uk, message us via our homepage or
call us on 01536 850940
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