In January 2025, digital platforms sent HMRC their first annual reports on UK sellers — names, tax details, transaction counts and income — under the OECD-derived reporting rules for digital platforms in force since 1 January 2024. The reports now arrive every January. The panic headlines ("Vinted tax!", "side hustle tax!") got one thing wrong and one thing right: no new tax was created — but HMRC can now cross-check what platforms pay you against what you declare. Here's how to know where you stand.
Which Platforms Report, and What
Any platform that lets you sell goods or services to UK customers is in scope: eBay, Vinted, Etsy, Depop, Amazon Marketplace, Airbnb, Uber, Bolt, Deliveroo, JustEat, TaskRabbit, freelance marketplaces like Fiverr and Upwork, and content platforms. Platforms must report sellers who, in a calendar year, exceed 30 sales or roughly €2,000 (about £1,700) in payments. Below both thresholds, the platform doesn't report you — but your tax obligations are unchanged either way.
The Question That Actually Matters: Trading or Not?
Selling Your Own Belongings — Usually No Tax
Clearing out your wardrobe, old games or furniture on Vinted or eBay is not trading — you're selling personal possessions, usually at a loss against what you paid, and no income tax arises however many parcels you post. (Only individual items sold for over £6,000 can trigger capital gains tax — see CGT on personal possessions — which is rare outside jewellery, art and watches.)
Buying or Making to Sell — Trading
You are trading if you buy things to resell, make things to sell, or provide services — driving, delivering, freelancing, renting out assets. HMRC's "badges of trade" look at frequency, organisation, profit motive and how items were acquired. A car-booter's occasional clear-out and a reseller sourcing stock every weekend look identical on a platform report; your records are what tell them apart. HMRC's own checker is good: check if you need to tell HMRC about your online platform income.
If You Are Trading: The Thresholds
| Gross trading income (per tax year) | What you must do |
|---|---|
| £1,000 or less | Nothing — covered by the trading allowance |
| Over £1,000 | Register for Self Assessment by 5 October after the tax year; declare the income; deduct either the £1,000 allowance or actual expenses |
| Approaching £50,000 | You'll also be pulled into Making Tax Digital quarterly reporting as the thresholds step down |
| £90,000 rolling turnover | Compulsory VAT registration |
Note the £1,000 is gross income, not profit, and it's one allowance across all your side activities combined — not per platform. Rental of property uses its own separate £1,000 property allowance, and Rent-a-Room has different limits.
If You Should Have Declared and Haven't
HMRC is matching platform reports against Self Assessment records and writing to mismatches. If past income should have been declared, a voluntary disclosure through HMRC's Digital Disclosure Service before they contact you means dramatically lower penalties — sometimes nil — compared with a prompted disclosure after a letter arrives. Don't wait for the letter.
Keep It Simple, Keep It Clean
- Download your platform sales reports at each tax-year end — they're now also what HMRC sees
- Keep purchase receipts for anything you resell — they're your profit evidence
- Separate bank account for anything that's genuinely a business
- Diarise 5 October (registration) and 31 January (filing and payment)
Unsure which side of the trading line you're on, or how much a disclosure would cost? SMD Accountancy sorts this out quickly and without judgment — book a free 20-minute call and bring your platform statements. You can also estimate any bill with our self assessment calculator.