HMRC explains what new ‘side-hustle tax’ means for eBay and Vinted users

HMRC has clarified the implications of the new ‘side-hustle tax’ for users of platforms like eBay and Vinted, which will be implemented starting in January. The tax authority has stated that there are no changes for occasional online sellers who are just getting rid of unwanted items. However, those who are actively trading or providing services online may need to pay tax and register for Self Assessment.

Angela MacDonald, HMRC’s Deputy CEO, emphasised that individuals who sold at least 30 items or earned around £1,700 in 2024 on platforms like eBay, Vinted, or Airbnb will have their sales data and personal information shared with HMRC by these platforms from January. This sharing of data does not automatically mean that the individual must complete a tax return, but it is essential for those who are actively trading or providing services online to ensure they meet tax obligations.

The new reporting requirements for digital platforms were introduced at the beginning of 2024. It is crucial to note that this is not a new tax, but rather a transparency measure to ensure online sellers fulfil their tax responsibilities. HMRC is collaborating with online platforms to provide clear guidance to sellers on their tax obligations and ensure compliance with the new regulations.

If individuals are uncertain about whether they need to complete a Self Assessment tax return for the 2023-2024 tax year, they can verify this on the GOV.UK website. Newcomers to Self Assessment can also register on GOV.UK to familiarise themselves with the process. HMRC aims to work closely with online platforms to support sellers in understanding and meeting their tax obligations.

In summary, HMRC’s clarification on the ‘side-hustle tax’ sheds light on the obligations of online sellers using platforms like eBay and Vinted. It highlights the importance of being aware of tax responsibilities and ensuring compliance with the new reporting requirements. By providing clear guidance and support, HMRC aims to streamline the process for individuals engaging in online trading and services.