There's no new 'side hustle tax'!
We want to give you peace of mind that there’s no new ‘side hustle tax’ or a change to existing tax rules for selling online.
In general, selling personal items is not taxed if they’re below £6,000 and you’re not selling as part of a business.
So, you still won’t pay tax unless:
You are ‘trading’ or buying and selling multiple items to try and make a profit or run a business
You sell an asset for more than £6,000 (the level where capital gains tax may apply)
A simple guide to UK Digital Sales Reporting
In the UK, online marketplaces like eBay are required to share seller tax identification information to HMRC. Depending on your yearly sales or number of sales transactions, you may need to provide eBay with your National Insurance (NI) number.
Check out these examples:
Grace, Manchester
Grace sells old clothes to make space in her wardrobe. Even if she sells a lot of her old or unwanted clothes she isn’t trading and sells her old clothes for less than she paid for them, so there is no tax.
Annual eBay sales: £420
Annual eBay profit: £0
Taxes owed: £0
Claire, Bristol
Claire sold her old furniture when she was moving house. Some of the furniture was valuable, but always less than £6,000 per item, so there is no tax.
Annual eBay sales: £4,000
Annual eBay profit: £0
Taxes owed: £0
Ben, London
Ben sells his collection of trading cards for a profit. Even though he receives £18,000 and makes a profit of £2,900, he has a capital gains tax-free allowance, so there is no tax.
Annual eBay sales: £18,000
Annual eBay profit: £2,900
Taxes owed: £0
Do I have to share information with HMRC?
From January 2024, new UK digital sales reporting rules require digital platforms like eBay to share information with them. However, this reporting doesn’t change your tax obligations.
On eBay, this should only affect newly registered accounts in 2024, which will extend to all accounts in 2025.
eBay will only report if you pass certain yearly sales thresholds:
- If your total sales on eBay exceed €2000, or roughly £1740, after fees.
- If you complete 30 or more sales transactions on eBay.
In general, selling personal items is not taxed if they’re below £6,000 and you’re not selling as part of a business.
When you may need to pay tax for selling goods online (according to HMRC)
Generally, only business sellers trading for profit might need to pay tax.
If you’re selling unwanted personal possessions, such as used clothes, an old mobile phone or unwanted furniture, it’s very unlikely you will have to pay income tax.
If you sell possessions for more than you paid for them you may have to pay capital gains tax, but only if your item sells for more than £6,000 and you exceed your annual allowance for such gains (currently £3,000).
For more information on when you may need to pay tax for selling goods online, see guidance and examples from HMRC.
You can also use HMRC’s ‘checker’ anonymously to check whether you may need to report any income.
Keep selling with confidence
Tax can be complicated. If you have any questions about whether you’re running a business or whether you have capital gains to pay on asset sales over £6,000, you should consult a tax advisor or look to guidance and examples from HMRC. For more information on digital sales reporting in the UK, please visit our Help page.