Will You Be Impacted By The New Online Seller Rules?

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HMRC has introduced new rules that affect anyone who sells items on sites such as eBay, Vinted, Etsy, or Depop or people who rent out their homes on Airbnb and other similar sites. It also includes delivery drivers for Deliveroo and UberEATS, or freelancers that sell services through a website and earn money from doing so.

The new regulations came into force on 1 January 2024. Digital platforms have until 31 January 2025 to report this information to the tax authorities, to cover the 2024 calendar year.

Although HMRC has always been able to request your information if you sell products or services via a UK-based online platforms when necessary. It was on a case-by-case basis. The new regulation means data sharing between digital platforms and the tax authorities is now automatic. It also covers international platforms.

Which digital platforms will it affect?

HMRC regards relevant digital platforms as websites, online marketplaces, and apps that allow people and companies to sell products and services to other individuals and companies, that connect to a third party.

It also includes UberEATS, Deliveroo, Just Eat or any other food delivery network or if you’re renting out a property on Airbnb, Booking.com, or Vrbo or your driveway, garage or parking space is available for hire via a digital platform then you may also come under the new rules.

Websites, apps or other software run by a business that are exclusively used to sell that business’s own goods or services don’t count as platforms.

I am only an occasional seller; will this affect me?

Someone who makes less than 30 sales or receives less than approximately £1,700 from a platform during the financial reporting period, would not be required to report data to HMRC.

If I sell second-hand goods on Vinted will I have to pay more tax?

You would only pay income tax on income from an online marketplace if that income was earned through a ‘trade’. For example, if you bought second-hand goods from eBay to purposely sell on Vinted, you would likely be classed as a ‘trader’ and should register for Self-Assessment to ensure your income is declared and appropriately taxed unless you were an occasional seller.

But if you made some money selling unwanted belongings through Vinted, it would be unlikely that you would need to register for Self-Assessment or pay tax on this income, even if it was more than £1,000. Find out more about the new reporting rules for digital platforms…

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“Any advice relating to accounts or tax should be sought from your tax accountant. Sage Accounts Solutions Limited will not be held responsible for any loss or damage caused as a result of the information contained herein.”

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