You may or may not be aware of recent developments involving HMRC, which has introduced fresh regulations from 01 January 2024 impacting online platforms such as eBay, Vinted, Etsy, and many others. These rules mandate that these platforms must now keep records of users' earnings on their platforms and submit this financial data to HMRC.
What this essentially means is that if you haven't been disclosing your income from these online platforms and paying the relevant taxes, HMRC is poised to uncover your supplementary income sources and charge penalties and/or interest.
There are exemptions for "occasional" sellers, defined as individuals who engage in fewer than 30 transactions throughout the calendar year, with a total income not exceeding £2,000, or whose side hustle generates less than £1,000 (before deducting expenses). Such sellers are unlikely to attract the attention of HMRC.
Moreover, if you are primarily selling items you no longer need, such as old clothing or books, often at prices lower than your initial purchase cost, and your activities lack a pattern of regularity, organisation, or explicit intent to generate profit, then you are not considered to be engaged in a trade. In such cases, you are less likely to fall within the purview of the new tax regulations.
If you do fall under these new rules, it will necessitate your registration for self-assessment, requiring you to declare your income from your side business and comply with tax obligations accordingly.
Get started with a free consultation to find out how we can help.