As more individuals and businesses turn to digital platforms to sell goods and services, HMRC has introduced new reporting rules to ensure tax compliance in the online economy. While no new taxes have been introduced, the way information is reported to HMRC has changed significantly—and online sellers need to be aware of the implications.
What’s Changed?
From 1 January 2024, digital platforms such as eBay, Vinted, Airbnb, Etsy, and Uber are now required to collect and report seller information to HMRC annually. This includes:
- Seller identity and contact details.
- Tax identification numbers (e.g., National Insurance or UTR).
- Total income from sales or services.
- Number of transactions.
These reports must be submitted to HMRC by 31 January each year, starting in 2025.
Who Is Affected?
You may be affected if you:
- Sell goods or services through a digital platform.
- Rent out property or vehicles online.
- Offer freelance or gig economy services (e.g., delivery driving, tutoring).
Important: If you sell fewer than 30 items and earn less than €2,000 (approx. £1,700) in a calendar year, your data will not be reported.
No New Tax – But Know the Rules
HMRC has confirmed that there are no new tax obligations for people selling unwanted personal items online. However, if you are trading—buying or making goods to sell for profit, or offering paid services—you may need to:
- Register for Self-Assessment.
- Declare your income.
- Pay tax if your total income exceeds £1,000 in a tax year (before expenses).
Risks of Non-Compliance
Failing to comply with HMRC rules can lead to:
- Penalties of up to £5,000, plus £600 per day for late reporting by platform operators.
- Fines of £100 per inaccurate record.
- Investigations and potential backdated tax bills for sellers who fail to declare taxable income.
HMRC is using this new data to identify individuals who may be under-reporting income. If you’re unsure whether your online activity counts as trading, it’s essential to seek professional advice.
Our Advice: Stay Informed and Stay Compliant
At Burgis & Bullock, we advise all clients involved in online selling to:
- Keep accurate records of all sales and expenses.
- Use HMRC’s online tools to check if your income is taxable.
- Register for Self-Assessment if your income exceeds the £1,000 threshold.
- Seek professional advice if you’re unsure about your obligations.
Need Help?
If you sell online—whether as a side hustle, small business, or full-time venture—we’re here to help you stay compliant and avoid costly mistakes.