Vinted, Depop and eBay UK tax — when sellers actually owe (2026)

From January 2025, online marketplaces — Vinted, Depop, eBay, Etsy, Airbnb and a handful of others — must report seller income directly to HMRC under the OECD's Model Reporting Rules for Digital Platforms. That changed everything for casual sellers. The rules on what's taxable haven't changed; HMRC's visibility into who's earning what has.

This guide covers exactly when you owe tax on platform sales, when the £1,000 trading allowance gets you off the hook, what records you need to keep, and what to do if you've under-declared in past years.

What HMRC now sees from the platforms

Until January 2025, HMRC only knew about your platform earnings if you told them, or if a separate investigation triggered a data request. Under the new rules, the platforms themselves now hand over an annual report by 31 January each year, covering the previous calendar year.

The data they share for each seller includes:

• Your full name, address and date of birth
• Your tax identification number (your UTR if you have one, or your NI number)
• Your bank account details
• Total gross consideration paid to you across the year
• Number of transactions
• Any platform fees and commissions deducted

Platforms only have to report sellers who exceed 30 transactions OR €2,000 (~£1,700)in a calendar year. Below those thresholds, the platform doesn't report. Above either threshold, HMRC gets the lot — even if your gross is well under the trading allowance.

The £1,000 trading allowance — the safety net

The trading allowance was introduced in 2017 to keep small sellers and casual freelancers out of the tax system. It works two ways depending on your situation.

If your gross income is £1,000 or less

You don't need to register, declare, or file anything. Full stop. HMRC may still receive data from the platform, but the figure is below the threshold and no return is required. Keep records anyway — if HMRC writes to you, you want to be able to show the maths.

If your gross income is above £1,000

You have to register and file. From there, you choose one of two methods:

• Claim the £1,000 trading allowance instead of expenses. Your taxable profit = gross income − £1,000. Simple, no record-keeping for individual costs. Best for low-cost side hustles (selling old items, casual reselling) where your actual expenses are tiny.
• Deduct your actual allowable expenses instead. Your taxable profit = gross income − genuine business costs (postage, packaging, materials, platform fees, mileage, a portion of phone/ internet). Best for sellers with real overheads — handmade crafts, high-volume resellers, anyone running mileage.

You can't claim both, and you choose per business per year. If you run two side hustles, each gets its own decision.

Trading vs hobby: the badges of trade

Selling old clothes from your wardrobe is not trading, even if you make £5,000 doing it. Selling clothes you bought specifically to resell is trading, even if you only made £200. The distinction matters because:

• Non-trading sales (selling personal items at a loss) are outside the income tax system entirely
• Trading sales are taxable income from the first pound (subject to the trading allowance)

HMRC uses six "badges of trade" to decide which side of the line you're on:

1. Profit motive. Did you buy with the intent to resell at a profit?
2. Frequency of transactions. One-offs look like personal sales. Regular sales look like a business.
3. Subject matter. Some items (bulk identical stock) are inherently business-like. A wardrobe of clothes is inherently personal.
4. Length of ownership. Short hold + quick resale = trading. Long hold = personal.
5. Supplementary work. Did you alter, repackage, or restore the item to add value? That looks like trading.
6. Source of funds. Did you borrow money to buy the stock? That suggests a business.

HMRC won't grade you against each badge — they look at the overall pattern. If you're not sure, the £1,000 trading allowance is your floor regardless: under £1,000 gross, you have nothing to report either way.

When you must register for Self Assessment

If your gross trading income exceeds £1,000 in a tax year (6 April to 5 April), you must register for Self Assessment by 5 October in the following tax year.

• Started trading in May 2025? You're in the 2025/26 tax year. Register by 5 October 2026.
• Filing deadline for that return: 31 January 2027 (online).
• Payment deadline: 31 January 2027 for any tax owed.

Registration is free and takes about 10 minutes via gov.uk/register-for-self-assessment. You'll get a Unique Taxpayer Reference (UTR) by post within ~10 days. Don't wait until 5 October — registration alone doesn't file anything; you still need the UTR before you can submit a return.

What expenses you can claim

If you choose the actual-expenses route (instead of the £1,000 allowance), HMRC accepts costs that are wholly and exclusively for the business. For platform sellers, that typically includes:

• Cost of goods sold — what you paid for the items you resold
• Platform fees — Vinted, Depop, eBay and Etsy commissions and listing fees
• Postage and packaging — actual cost of envelopes, tape, mailers, postage labels
• Materials — for handmade goods, the cost of fabric, beads, paint, glaze, etc.
• Mileage — 45p/mile for the first 10,000 business miles, 25p/mile thereafter (sourcing trips, post office runs)
• Phone and internet — the business portion only
• Use of home as office — simplified rate (£10/£18/£26 per month) or actual costs
• Storage — if you rent off-site space for stock
• Photography props/lighting — if used purely for listing photos

You don't need to claim the actual-expenses method if your expenses are below £1,000 — the trading allowance gives you more deduction for free. Run the numbers both ways.

Three real-world examples

Example 1: Casual Vinted seller

Sarah sold £620 of her old clothes on Vinted in 2025/26, all from her wardrobe. Vinted fees took £45. She didn't buy anything to resell.

Sarah owes nothing. She's not trading (no profit motive, personal items), and even if she were, £620 is under the £1,000 trading allowance. No registration, no return needed. Vinted may report her to HMRC if she crossed 30 transactions, but the figure speaks for itself.

Example 2: Side-hustle reseller

Tom buys vintage trainers from charity shops and resells on Depop. In 2025/26 he made £4,200 in sales. He paid £1,800 for stock, £180 in Depop fees and £290 in postage.

Tom is trading (profit motive, regular transactions, short ownership, repeated sourcing). He must register for Self Assessment. He should deduct actual expenses (£2,270) rather than the £1,000 allowance, because his costs are higher. If his day-job salary already uses his Personal Allowance, he'll pay 20% on £1,930 = £386 plus Class 4 NI (6% on the chunk above £12,570 cumulative profit threshold — none in this case, so just £386).

Example 3: Etsy maker

Maya makes ceramic mugs and sells on Etsy. 2025/26 sales: £8,400. Materials £1,100, Etsy fees £760, postage £620, kiln electricity share £180, packaging £140, advertising £200. Total expenses £3,000.

Maya is clearly trading. She picks actual expenses over the £1,000 allowance (saves her an extra £2,000 of tax-free profit). Her taxable profit is £5,400. Tax owed depends on her other income — if Etsy is her only earner, the whole £5,400 sits inside her £12,570 Personal Allowance and she pays £0 income tax (but does pay £162 in Class 4 NI on the bit above £12,570 only if profits push past, which they don't here).

What happens if you don't declare

Now that HMRC receives platform data automatically, undeclared income is a near-guaranteed compliance check. The penalty regime for failing to notify is harsher than for late filing:

• Failure to notify (didn't register). Penalty is a percentage of the tax owed: 30% if HMRC catches you (careless), 70% if deliberate, 100% if deliberate and concealed. Plus the tax. Plus interest from the original due date.
• Voluntary disclosure. If you declare proactively before HMRC contacts you, the percentage drops sharply (often 0–10%). Use HMRC's Digital Disclosure Service for prior-year corrections.

Your action checklist

1. Add up your gross platform sales for the tax year (6 April–5 April), across all marketplaces combined.
2. Decide whether you're trading or selling personal items using the badges of trade above.
3. If trading and gross is over £1,000, register for Self Assessment by 5 October following the tax year.
4. Pick the better deduction route: £1,000 trading allowance OR actual expenses.
5. Keep a simple log: every sale, every fee, every cost. Spreadsheet is fine; the platforms can export this for you.
6. File your return online by 31 January following the tax year. Pay any tax owed by the same date.
7. If you've missed prior years, disclose voluntarily via HMRC's online disclosure service.