With online trading platforms reporting activity directly to HMRC it is important to recognise if you are classed by HMRC as an online trader for tax purposes.
The new year is a popular time to sell unwanted items online via the likes of vinted and ebay but getting rid of the gift that you will never use doesn’t necessarily make you a trader.
HMRC wrote on the online platform X/Twitter: “You don’t need to pay income tax on selling your own personal items such as used clothes, an old TV, or unwanted furniture. This does not make you a trader.”
If you are unsure if you should be declaring income from an online source for the 23/24 financial year it’s worth double checking.
The HMRC guidance relating to online trading states:
You may need to tell HMRC if you receive income through an online marketplace or social media. This could be whether it’s your main source of income or an additional source — sometimes called a ‘side hustle’.
Income could be money, gifts or services you have received from:
- selling personal possessions.
- selling goods.
- providing a service.
- creating online content.
- renting out land or property.
You can use the HMRC online additional income checker tool https://www.tax.service.gov.uk/guidance/check-non-paye-income/start/how-did-you-receive-additional-income for further verification.
If you are an individual trading online and your overall self employed income is below the trading allowance your income should be exempt from income tax and a tax return may not be necessary.
Registering for self assessment to report online trading income can be done online by using the CWF1 form which notifies HMRC of your self employed revenue.
2023/24 tax return deadline approaching
Last week HMRC reported that at the time of writing around 5.4 million people still had a self assessment tax return to submit for the 2023 to 2024 tax year.
Getting your tax return to HMRC by the January 31 2025 deadline is essential to avoid a late filing penalty and potentially late payment interest if you owe HMRC income tax.
HMRC stresses that they can be lenient if you have a reasonable excuse why you can’t submit your tax return on time and let them know before the expected due date.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
“We know completing your tax return isn’t the most exciting item on your New Year to-do list, but it’s important to file and pay on time to avoid penalties or being charged interest.
The quickest and easiest way to complete your tax return and pay any tax owed is to use HMRC’s online services – go to GOV.UK and search ‘Self Assessment’ to get started now.”
HMRC confirmed the 2023/24 tax return filing figures over the 2025 new year period:
- 38,260 filed on New Year’s Eve.
- 24,828 filed on New Year’s Day.
Using free online services provided by HMRC are helpful if you need details like your national insurance number (NINO), employers PAYE tax reference number or your P60 pay and tax details.
HMRC’s downloadable app or your personal tax account accessed through .GOV are easy to use and available at a time that suits you.
