Did you know that there is a new law which requires online marketplaces – such as Depop, Vinted, eBay and Gumtree – to report income made by their users automatically to HMRC?
This new law has sparked many a discussion ….
“Will I have to pay tax on the money I make from selling my old belongings via digital apps?”
The rules for declaring income and paying tax on it have not changed. If you sell your old clothes or other household items online, it’s unlikely that this action will give rise to tax liabilities. However, if you undertake a commercial venture with a view to making a profit (e.g. buying stock to resell at profit on a regular basis), you are likely to be regarded as carrying out a trade and liabilities to both Income Tax and National Insurance may arise.
Fortunately, if your trading income (before expenses) is no more than £1,000 annually, it can be disregarded. However, if you think you might be carrying out trading activities and could be liable to Tax/National Insurance, please speak to one of our tax advisers on 01223 810100.