E-commerce – Tax
eBay, Etsy and Vinted: when your side hustle becomes taxable
Selling your old clothes on Vinted is usually tax-free. Buying stock to resell for a profit usually isn’t. Here is exactly where that line sits, how HMRC sees your sales in 2026, and what to do once you cross it.
Here is the short version. If you are selling your own unwanted belongings for less than you paid, there is almost never any tax to worry about, however much it adds up to. If you are buying or making things specifically to resell at a profit, that is trading – and once your gross trading income for the year goes over £1,000, HMRC expects you to declare it.
There is no separate “side hustle tax”. HMRC has not introduced a new tax on eBay, Etsy or Vinted sales. What has changed is visibility: under the OECD Model Reporting Rules for Digital Platforms – the UK’s equivalent of the EU’s DAC7, live since January 2024 – these platforms must now report sellers who hit 30 or more sales or take over roughly £1,735 (€2,000) in a calendar year. And if you have seen headlines about a “£3,000 threshold”, that is a change to when you file a return, not a new tax-free amount – we explain it below.
At a glance
| Question | Short answer |
|---|---|
| Is this a new tax? | No – the same income tax rules as always, just more visibility for HMRC |
| Do I owe tax selling my old clothes? | Usually not, if sold for less than you paid – there’s no profit to tax |
| What’s the trading allowance? | £1,000 of gross trading income per year, combined across all platforms |
| Is the allowance rising to £3,000? | No – the £1,000 tax-free allowance stays. Only the return-filing threshold is set to rise later, and tax is still due on profit over £1,000 |
| When does a platform report me to HMRC? | 30+ sales, or over roughly £1,735 taken, in a calendar year |
| Does a report mean I owe tax? | No – it’s a prompt for HMRC to cross-check, not an automatic bill |
When does a side hustle become taxable?
£1,000 gross, combined across every platform
A side hustle becomes something HMRC expects declared once your gross trading income for the tax year goes over £1,000 – and that £1,000 is a single combined allowance across all your selling activity, not a separate £1,000 for each platform.
£600 on Etsy plus £600 on eBay is £1,200 combined gross income – over the threshold, even though neither platform alone crossed it. Crucially, going over £1,000 does not automatically mean you owe tax. It means you need to register for Self Assessment and declare the income; once allowable expenses are deducted, your actual tax bill might still be small or nil.
Isn’t the allowance going up to £3,000?
A reporting change, not a bigger tax-free allowance
In March 2025 the government announced that the Self Assessment reporting threshold for trading income will rise from £1,000 to £3,000 gross. It is expected to take effect later this parliament, but no firm start date has been confirmed – so it does not apply for the 2026/27 tax year.
Read the detail, though, because this is the single most misunderstood point online. It changes when you have to file a full tax return, not how much you can earn tax-free. The £1,000 trading allowance is staying exactly as it is. If your trading profit is over £1,000 you still owe tax on it – and sellers earning between £1,000 and £3,000 are expected to report through a new simplified HMRC online service (planned for around 2029) rather than a full return.
eBay, Etsy, Vinted and HMRC’s reporting rules
New visibility, not a new tax
Since January 2024, digital platforms including eBay, Vinted, Etsy, Depop and Airbnb have been legally required to collect and report seller data to HMRC under the OECD Model Reporting Rules for Digital Platforms (often called DAC7, after the EU’s equivalent).
From April 2026 that reporting is fully and routinely enforced, not a pilot. A platform reports a seller once they either make 30 or more sales in a calendar year, or take over roughly £1,735 (€2,000) across those sales – whichever comes first. HMRC receives this data annually and cross-checks it automatically against Self Assessment records; enquiry letters have been triggered by discrepancies of well under £100, so the compliance net is genuinely tight.
| Sale type | Usually taxable? |
|---|---|
| Old clothes or unwanted items sold for less than you paid | No – no profit means no trading income |
| Items bought or made specifically to resell for profit | Yes, once combined gross income exceeds £1,000 |
| Occasional one-off sale of a valuable personal item | Usually not income tax, though separate capital gains rules can apply to high-value items |
Registering for Self Assessment
Register by 5 October, file and pay by 31 January
Once your combined gross trading income for the tax year goes over £1,000, you generally need to tell HMRC by 5 October following the end of that tax year, file your return online by 31 January, and pay anything owed by the same date – with a possible payment on account due the following 31 July.
Miss the deadline and HMRC’s late filing penalties start at £100 and escalate the longer a return remains outstanding, with separate penalties for paying late on top. Since platforms now report your figures directly, a missing or mismatched return is far more likely to trigger an automatic enquiry than it would have a few years ago.
Expenses you can claim
| Expense | What typically counts |
|---|---|
| Cost of goods | What you paid for stock you’ve bought specifically to resell |
| Platform & payment fees | eBay, Etsy, Vinted selling fees and payment processing charges |
| Postage & packaging | Shipping costs and packaging materials not covered by the buyer |
| Business mileage or travel | Sourcing trips genuinely related to buying stock |
| A share of home costs | If you regularly use part of your home for the business admin |
If your genuine expenses come to more than £1,000, claiming your actual costs instead of the flat trading allowance is usually the better option – it’s one or the other, not both, so it’s worth checking which gives the lower taxable figure each year.
Worked example: crossing the trading allowance
A seller runs a Vinted account for two different things across one tax year: clearing out her own wardrobe, and buying vintage pieces cheaply to clean up and resell. Here’s how the two activities are treated differently:
Her gross resale income of £1,850 was already over the £1,000 threshold, so she had to register – even though her actual tax bill came to just £170.
Her personal declutter sales never entered this calculation at all, since selling her own clothes for less than she paid created no profit to tax. The registration requirement was triggered by the resale activity alone – which is exactly the distinction most sellers miss when they see a platform report letter and assume every sale counts against them.
Setting money aside for tax
The safest habit is treating a fixed percentage of every resale sale as not yours from the moment it lands – moved to a separate account as it comes in, rather than calculated once a year under deadline pressure. For most sellers still within the basic rate band, setting aside somewhere around 20-25% of resale profit covers income tax comfortably, though this varies with your total income for the year.
If reselling has grown from an occasional side hustle into something closer to a proper business, it’s also worth reviewing whether a sole trader setup is still the most tax-efficient structure – our sole trader vs limited company calculator gives a quick, current-rates comparison. And once you’re ready to actually register and file, our self-assessment tax return service makes sure resale income, expenses, and the trading allowance are all handled correctly from the first return.
If your resale income is climbing, keep an eye on Making Tax Digital for Income Tax too. From April 2026 it applies to sole traders with qualifying income over £50,000, dropping to over £30,000 from April 2027 and over £20,000 from April 2028 – and it means keeping digital records and sending HMRC quarterly updates rather than one return a year, so it’s worth knowing before you’re in scope rather than after.
Our e-commerce accounting team works with resellers and marketplace sellers specifically, so growth from side hustle to genuine business is tracked properly from the point it actually happens, not reconstructed a year later from platform statements.
Frequently asked questions
How much can I sell on Vinted or eBay before I pay tax?
It depends on what you’re selling. Personal items sold for less than you paid aren’t taxable, however much they add up to. For things you buy or make to resell at a profit, the tax-free trading allowance is £1,000 of gross income per tax year, combined across every platform. Go over £1,000 and you need to register for Self Assessment, though your actual bill after expenses may still be small.
Do I have to pay tax on selling my old clothes on Vinted?
Usually not. If you’re selling personal items for less than you originally paid, there’s generally no income tax because there’s no profit. Keep evidence of what you paid and when, particularly for higher-value items.
Is the £1,000 trading allowance per platform or combined?
It’s a single combined allowance across all your selling activity – eBay, Etsy, Vinted and any other platform together, not £1,000 for each one separately.
Is the side hustle tax allowance going up to £3,000?
Not the tax-free allowance. The government has said the Self Assessment filing threshold for trading income will rise from £1,000 to £3,000, but that only changes when you have to submit a return – not how much is tax-free. The £1,000 trading allowance stays, tax is still due on profit above it, and no firm start date has been set, so the £1,000 rules still apply for 2026/27.
Will I automatically get a tax bill if a platform reports me to HMRC?
No. A platform report is simply data HMRC can cross-check against your Self Assessment record – it’s a prompt to verify, not an automatic charge. If your actual profit is within the trading allowance or your expenses reduce it accordingly, there may be nothing to pay.
What happens if I don’t register and HMRC finds out from platform data?
Late filing penalties start at £100 and increase the longer a return is outstanding, with separate penalties for late payment. Since platform data is now cross-checked automatically, a missing return is considerably more likely to be picked up than in previous years.
Should I claim the trading allowance or my actual expenses?
Whichever is higher. If your genuine costs – stock, fees, postage – come to more than £1,000, claiming actual expenses usually reduces your taxable profit further than the flat trading allowance would.
Know exactly where your line sits
If you’re not sure whether your selling activity counts as personal decluttering or a taxable side hustle, it’s worth checking before a platform report lands rather than after.
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