eBay UK digital sales reporting to HMRC

Category: Operations
eBay UK digital sales reporting to HMRC

eBay have issued advice to sellers on the platform regarding the new mandatory digital sales reporting to HMRC on sales numbers. This will catch those sellers appearing to be private sellers but actually operating as a business.

From the 1st of January 2024 the new UK digital sales reporting legislation requires eBay, and other UK digital marketplaces, to report a user’s sales over clearly defined thresholds to HMRC. The UK digital sales reporting should only affect newly registered accounts in 2024 and all accounts in 2025 who pass either of the below calendar year sales thresholds on eBay: 

  • Total sales on eBay is equal to or more than €2,000 (approximately £1,740) after deducting fees and commissions or taxes
  • 30 or more sales transactions are completed on eBay (cancelled transactions are not included in the calculation)

Starting from January 2025, the prior calendar year’s eBay digital sales information will be reported to HMRC each January and a copy of the reported data will be provided to sellers. eBay recommend that you consult HMRC or a tax advisor if you have any questions about your tax obligations. 

This is intended to ensure those trading to make a profit report their income and pay taxes. There have been many questions as to how it will impact those selling off possessions, for instance in the case of a death in the family or when downsizing to move to a smaller retirement home.

There’s some good news in these cases, while marketplaces might be obliged to dob you in to HMRC, you should be able to justify that you’re not trading for profit. Quite how you will do this has yet to be seen, but if you are selling off possessions for some reason and crucially not making a profit (i.e. selling at a price point below the original purchase price) you shouldn’t be liable for income tax or capital gains tax.

eBay have set out the following examples:

  • In order to pay tax on the goods or services you sell online, you either have to be trading or making a capital gain.
  • If you are just selling some unwanted possessions that have been lying around your home, such as the contents of a loft or garage, it is unlikely that 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 you exceed your annual allowance for such gains (currently £6,000). For more information on capital gains tax on personal possessions, see guidance from HMRC.

For those selling at a profit:

  • If you buy goods for resale, or make goods with the intention of selling them for a profit, then you are likely to be trading and will have to pay tax on your profits.
  • However, if your total income from trading or providing services online was less than £1,000 (before deducting expenses) in any tax year, you would not be required to inform HMRC nor pay any tax on the profits (this is due to the Trading and Miscellaneous Income Allowance).

eBay say that for more information on when you may need to pay tax for selling goods online, refer to guidance and examples from HMRC.

9 Responses

  1. I think this is wrong “The UK digital sales reporting should only affect newly registered accounts in 2024 and all accounts in 2025 who pass either of the below calendar year sales thresholds on eBay:” Isn’t it for all accounts regardless of when they were opened?

    1. Yes. It was poorly-worded by Ebay. All accounts will be reported. Perhaps some read this and thought they’ve got away with it.

    2. Yes, it applies to ALL accounts, no matter when they were created.
      What they meant in the article is that it is effective from 1st jan 2024 onwards.

  2. Everything that lacks a pulse
    Is airbnb in our area .
    it should be fun to watch the housing market if HMRC get serious

  3. Cant work out why they just dont apply a digital sales tax collected by the marketplaces
    To save all this hooha

  4. If you have been doing a tax return ( 15 years for me) online sales and rental income they are not going to bother you. Plus £6k is a fair chunk for personal bits we flog all the kids stuff on Vinted and it is not anywhere near that.
    Everyone is wetting themselves on Facebook about this however. HRMC don’t even have the staff to deal with what they have tbh. I have been trying to get someone on the actual phone for a YEAR they owe me £500 from their mess.

  5. Why do they have those 2 very different thresholds?

    If they want to look at private sellers doing over £2K a year, there is some sense in that. Even at just the £2K turnover threshold figure, there could be hundreds of pounds of tax potential, if it is deemed a business.

    If they want to look at sellers doing just 30 sales a year, then that doesn’t make a lot of sense. That would surely be everyone who is remotely active on ebay. It’s not even 3 sales a month. It’ll include people who don’t even have a £200 sales total for the year, people just getting rid of old books, films, music, clothes etc. It’s not worth HMRC looking at, as there’s nothing there for them to ask for the tax on legitimately.

    HMRC have put an amount of money and staff into this, and they’ll need to get a return, probably wanting 3 or 4 times their costs. If they don’t get it from the big side-hustlers, they’ll have to work their down, until perhaps scraping the bottom of the barrel, they’re wanting to see a receipt for that book you sold for £6. At least, that is what people will fear will happen. It’ll be interesting to see what actually happens.

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