Martin Lewis issues urgent new tax warning for eBay and Vinted sellers
The Money Saving Expert Martin Lewis has issued a new tax warning for anyone selling their items on eBay, Vinted or any other selling platforms ahead of the Friday deadline. He said these websites will now need to report your earnings to the HMRC, if they are over a certain amount.
During the Martin Lewis Money Show aired on ITV on Tuesday, the Money Saving Expert warned eBay and Vinted sellers about the new rule. If they are selling 30 or more items a year or have made over the equivalent of €2,000 (around £1,700), then they will have their information passed over to HMRC.
Martin talked about the Trading Allowance. This means sellers may have to pay tax if they earn £1,000 in one tax year from selling. But, if they earn more, then it will probably need to be reported to HMRC and they may need to pay tax. They don’t have to declare additional income if it comes to under £1,000.
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However, if they are just selling any unwanted items, then it is unlikely they will need to pay tax. Those who are considered to be "trading" will likely need to pay tax, for example, if they are buying goods with the intention of selling them on for profit. The HMRC website offers more guidance.
Martin Lewis said: "The tax rules have not changed. Tax is only due for those who are traders. That is people who are deliberately buying stuff in order to sell it for a profit, or building and repairing it in order to sell it for a profit, not [my producer] Alex, who was telling me she cleared out a wardrobe and was worried.
"You cleared out your wardrobe. It's your stuff. You didn't buy it for profit. You're absolutely fine. Now if you are trading selling for profit, you can sell a maximum £1,000 a year stock including platform fees. Above that, you are and have always been eligible to pay tax."
If you already report your additional income to HMRC, then the new rules won’t affect you as you’re already sharing your extra earnings, The Mirror reports. It will affect people who are not doing this or under-reporting their earnings. If you do need to pay tax, this normally has to be done through self-assessment.
The deadline to file your tax return for the 2023/24 tax year is January 31 - miss this deadline, and you’ll be slapped with a £100 fine from HMRC, even if you have no tax to pay. This increases to fines of £10 a day, up to a maximum of £900, if you still haven’t filed after three months - then after six months, you’re charged 5% of tax owed or £300, whichever is greater. This is then repeated again after 12 months.