HMRC (His Majesty's Revenue and Customs) has issued a message to anyone selling unwanted Christmas presents online.
If you make an income selling goods through online marketplaces or social media such as eBay, Vinted and Facebook Marketplace, then in some cases you may have to pay tax.
However, this is dependent on whether it is your main source of income or an additional source, like a 'side hustle'.
In a message on X (formerly Twitter), HMRC said anyone selling personal items, including gifts, online does not need to pay Income Tax on these. Personal possessions can include items like clothing, ornaments, kitchen equipment, table and chairs, jewellery, computers and mobile phones.
The government body wrote: “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.”
But sellers should note that depending on the items being sold, and how much they sell for, in some cases you may need to pay Capital Gains Tax.
This applies to selling personal possessions where the item is worth more than £6,000. It also applies to the total value of items which form a set, such as chess pieces, books by the same author or on the same subject, or matching ornaments, such as vases or statuettes.
You can use HMRC's online tool to check if you need to tell the government about income you get from using online platforms, and in some cases you may still need to tell HMRC about your income, even if you don't have to pay any tax. on it.
Angela MacDonald, HMRC's Second Permanent Secretary and Deputy Chief Executive Officer, said: “We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due. As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for Self Assessment.”
Those who may need to register for Self Assessment and pay tax include those who:
-
buy goods for resale or make goods with the intention of selling them for a profit
-
Offer a service through a digital platform – such as being a delivery driver or letting out a holiday home through a website
-
AND generate a total income from trading or providing services online of more than £1,000 before deducting expenses in any tax year
If you regularly sell goods or provide a service through an online platform, HMRC recommends that you check the guidance about selling online and paying taxes on GOV.UK.
A link is also available on the HMRC app in the 'news' section under the 'communication' tab to help you decide if your activity should be treated as a trade and if you need to complete a Self Assessment tax return.