Facebook Marketplace, Vinted and Ebay have a created a great opportunity to recycle your used and wanted stuff.
And if you are like a lot of people clearing the shed, garage or your wardrobe of unused bikes, an old BBQ or clothes you no longer wear brings you a lot of joy.
However, the recent news about the crackdown by HMRC on people selling stuff on digital platforms has created a lot of fear and anxiety.
After all, the last thing you want to do is sell all your unused stuff at the car boot sale only to get hit with a massive tax bill from HMRC.
The good news is that if you are selling your own stuff, for example clearing space in your house of stuff you no longer use, HMRC are not interested in knowing about it. And no you will not get a tax bill through your door for the stuff you have been selling.
For example;
Selling your children’s old clothes
Let’s say your children have grown out of all their clothes and you decide to sell them. Because this is likely to be a one off activity and the items are likely to be less than you paid for them, this would not be classed as trading.
Clearing your garage or shed of unused items
If you have a garage or shed which is stacked full of things you no longer use or want, the likelihood is that someone will probably pay you for it. Selling your old BBQ, suitcases or garden furniture is perfectly acceptable, and HMRC are worried about this activity. This is because are likely going to be selling the old good for less than you paid for them, and are therefor not looking to make profit.
If however you decide to start a side hustle to make money on the side, which involves you buying and selling stock that you have purchased new or used, on a reglarly basis this would be classed as trading, and would therefore be of interest to HMRC.
For example;
Buying and Selling clothes for Profit
If you buy used clothes from people at a car boot with the intention of then selling these clothes on Facebook Marketplace or vinted. If this is something you plan on doing on a regular basis, this is considered as trading and you would need to set yourself up for self assessment.
Buying and selling second hand bikes for profit
Alternatively, if you are buying second hand bikes and then selling them on for profit, once again this would be considered as trading and HMRC would need to know about this activity.
The good news though is that there is a £1000 trading allowance per tax year for any body that has a small income from these previously mentioned activities such a buying and selling old clothes and bikes for profit.
This means you can earn under £1000 per tax year and not have to declare the income you get to HMRC.
How do you prove to HMRC you are only selling off your possession?
A popular question people have is how do you prove to HMRC you are only selling off your possessions and not trading. If you only sell your unwanted clothes, bikes or children’s toys this is probably only going to happen for short periods of time during the year.
If however you are consistantly and regularly selling mens or woman’s fashion on a regular basis throughout the week this is going to give the appearance of trading and will therefore raise a flag in terms of HMRC.
What happens if I decide to sell stuff regulary for profit on Vinted and Facebook Marketplace?
If you decide your killing it at selling stuff regulary on Facebook Marketplace or vinted, and your income goes over the £1000 per year trading allowance then to avoid getting into trouble with HMRC you need to become self employed and do the following:
To start you need to register for self assessment as you will need to become self employed
keep records of your income and expenses you have relating to your trading
ask an accountant to prepare and file a tax return each tax year which runs from 6th April–5th April the following year
What happens if make less than £1000 on Facebook, Vinted or Ebay what do i need to do?
A lot of people who sell things on digital platforms (e.g: Facebook, Vinted or Ebay) may only do so on a short term or part time basis and may make under £1000 per tax year.
If this sounds like you you don’t need to worry, you can carry on doing so, because the trigger for HMRC when investigating people on sites like facebook or ebay is £1000. If you earn under that amount you are ok to carry on selling.
Disclaimer
We do not provide accounting, tax, business, or legal advice, and this article has been created for informational purposes only. You should consult your own professional tax advisors for advice and support.
ugoscootersblog.com 
Facebook Marketplace, Vinted and Ebay have a created a great opportunity to recycle your used and wanted stuff.
And if you are like a lot of people clearing the shed, garage or your wardrobe of unused bikes, an old BBQ or clothes you no longer wear brings you a lot of joy.
However, the recent news about the crackdown by HMRC on people selling stuff on digital platforms has created a lot of fear and anxiety.
After all, the last thing you want to do is sell all your unused stuff at the car boot sale only to get hit with a massive tax bill from HMRC.
The good news is that if you are selling your own stuff, for example clearing space in your house of stuff you no longer use, HMRC are not interested in knowing about it. And no you will not get a tax bill through your door for the stuff you have been selling.
For example;
Selling your children’s old clothes
Let’s say your children have grown out of all their clothes and you decide to sell them. Because this is likely to be a one off activity and the items are likely to be less than you paid for them, this would not be classed as trading.
Clearing your garage or shed of unused items
If you have a garage or shed which is stacked full of things you no longer use or want, the likelihood is that someone will probably pay you for it. Selling your old BBQ, suitcases or garden furniture is perfectly acceptable, and HMRC are worried about this activity. This is because are likely going to be selling the old good for less than you paid for them, and are therefor not looking to make profit.
If however you decide to start a side hustle to make money on the side, which involves you buying and selling stock that you have purchased new or used, on a reglarly basis this would be classed as trading, and would therefore be of interest to HMRC.
For example;
Buying and Selling clothes for Profit
If you buy used clothes from people at a car boot with the intention of then selling these clothes on Facebook Marketplace or vinted. If this is something you plan on doing on a regular basis, this is considered as trading and you would need to set yourself up for self assessment.
Buying and selling second hand bikes for profit
Alternatively, if you are buying second hand bikes and then selling them on for profit, once again this would be considered as trading and HMRC would need to know about this activity.
The good news though is that there is a £1000 trading allowance per tax year for any body that has a small income from these previously mentioned activities such a buying and selling old clothes and bikes for profit.
This means you can earn under £1000 per tax year and not have to declare the income you get to HMRC.
How do you prove to HMRC you are only selling off your possession?
A popular question people have is how do you prove to HMRC you are only selling off your possessions and not trading. If you only sell your unwanted clothes, bikes or children’s toys this is probably only going to happen for short periods of time during the year.
If however you are consistantly and regularly selling mens or woman’s fashion on a regular basis throughout the week this is going to give the appearance of trading and will therefore raise a flag in terms of HMRC.
What happens if I decide to sell stuff regulary for profit on Vinted and Facebook Marketplace?
If you decide your killing it at selling stuff regulary on Facebook Marketplace or vinted, and your income goes over the £1000 per year trading allowance then to avoid getting into trouble with HMRC you need to become self employed and do the following:
Being self employed can be confusing and a little daunting so it is always advisable to speak to an accountant who can help.
What happens if make less than £1000 on Facebook, Vinted or Ebay what do i need to do?
A lot of people who sell things on digital platforms (e.g: Facebook, Vinted or Ebay) may only do so on a short term or part time basis and may make under £1000 per tax year.
If this sounds like you you don’t need to worry, you can carry on doing so, because the trigger for HMRC when investigating people on sites like facebook or ebay is £1000. If you earn under that amount you are ok to carry on selling.
Disclaimer
We do not provide accounting, tax, business, or legal advice, and this article has been created for informational purposes only. You should consult your own professional tax advisors for advice and support.
Share this: