It’s all to do with tax…
Martin Lewis has urged everyone who sells items on Vinted and eBay to carry out an important check or risk losing thousands.
At the start of this year, HMRC announced new procedures were in place for people selling second hand goods online or renting property.
Online firms such as Vinted, eBay and Airbnb must now share details of how much their users make through the platform, so that HMRC can work out if they should be paying tax on it.
On Wednesday evening, Lewis tweeted: “Sell on eBay, Etsy or Vinted or rent your home on Airbnb?
“Firms will now report some earnings to HMRC, so check if yours will be and if you need to pay tax.”
Clarifying the details of the new rules in an article on the Money Saving Expert website, Lewis said: “If you sell goods online on sites such as eBay, Etsy or Vinted, rent out your home on Airbnb, or earn extra income from providing services via platforms including Deliveroo or Uber, then these firms will soon start passing on information about you to HMRC.”
But he explained that a company will only pass your data onto HMRC if, over the course of the year, you sell 30+ items on the platform or £1,700 worth of items.
So, Vinted and eBay sellers should check just how much they are selling on the platforms to figure out whether or not they will end up being taxed on it.
Crucially though, this new tax only applies to people classed as ‘traders’ i.e. people making things with the intention of selling them online for profit.
Lewis said: “For example, if you’re buying furniture, decorating it and selling it on for more than you bought it for, this would be considered trading (unless it was a one-off). But if you cleared old stuff out of your attic and sold it, you wouldn’t be trading.”
HMRC says that nothing has changed for people who just use online marketplaces to sell unwanted second hand goods, and that the tightening up of the rules are designed to “ensure online businesses cannot undercut traditional businesses by evading tax.”
If you didn’t have to pay tax on earnings from second hand sites before, then that will still be the case. All that has changed is that it is not easier for HMRC to check who should be paying tax on earnings throughs sites like Vinted and eBay.
If you think you owe tax, you should file a self-assessment tax return as soon as possible by going to the government website. The deadline for the 2022/2023 tax year is 23:59 on January 31.
Related links:
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