If you’re making a tidy profit selling old clothes on Vinted, or flogging things you no longer need on eBay then you may need to be aware of new tax rules.
New rules brought in by HMRC yesterday (January 1) has seen a tightening of tax rules for those who make a decent profit on side hustles, such as selling second hand goods online or renting out a property on Airbnb.
As of yesterday, firms including Vinted, eBay, Fiverr and Airbnb will be obligated to share details of how much money people are making online with HMRC so the tax office can check if people are paying tax if required.
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HMRC will also launch investigations if it suspects tax avoidance.
An HMRC spokesperson said: "These new rules will support our work to help online sellers get their tax right first time.
"They will also help us detect any deliberate non-compliance, ensuring a level playing field for all taxpayers."
The news rules also cover services that allow people to bring in cash on the side, such as Uber driving, freelancing through sites like Fiverr and takeaway delivery companies like Deliveroo.
The firms involved will also need to update HMRC at the end of this month, and will share information such as bank account details and tax ID, as well as the value and volume of transactions for sellers whose activity is of significant enough size.
Under the new rules set out by the Organisation for Economic Cooperation and Development (OECD), companies will not be asked to share data about sellers who make fewer than 30 transactions or less than £1,735 a year.
In the UK, the Trading Allowance means people can earn up to £1,000 a year outside their normal job without having to pay tax.
But once it passes that threshold you need to submit a self-assessment tax return and pay what is owed.
Adam Jay, chief executive of Vinted, told the BBC that he didn’t think the new rules would impact many of the platform’s current users.
"It's actually quite a small proportion of users of our platform who will trigger this threshold where we need to provide information.
"It's only those people who are making a profit from selling second-hand items that might be eligible for tax and then it's about their own personal tax situation what tax would ultimately be due to HMRC.
"We'll be actively reaching out to those sellers explaining what the new requirements are why they exist."
Claire Reid