Vinted, eBay and Etsy sellers are at risk of going under investigation as HMRC invests £40m in additional resources to find tax avoiders, say experts.
As more UK residents look to side hustles to make some extra cash, tax professionals are raising the alarm.
On Vinted, particularly, reporting thresholds were tightened, and it's been reported that users who either do 30 sales per year or exceed £1,700 of gross sales over 365 days must now have their data reported with HMRC.
Lee Murphy, Managing Director of The Accountancy Partnership, a specialist in tax returns for Amazon and eBay, discusses how HMRC could detect and act on your side hustle.
“HMRC uses data provided by the platform, whether this is Etsy, Vinted or even eBay, to match against each individual’s tax records," he says.
"Those who’ve exceeded an annual trading allowance of £1,000 and also fail to declare this may receive reminder letters to ensure that they get their tax return done.
"While you may think this is just a scare tactic, ignoring these types of letters may lead to further full tax inquiries and criminal investigations.”
To work out how much tax you should be paying for selling items online, you can check using this tax calculator.
If you earn over £1,000 from your side hustle each year, then you must let HMRC know about this. But, if you are only selling your own pre-used items, you are unlikely to need to pay anything.
“If you are selling unwanted personal items and not making repeat trades or dropshipping, then you’re unlikely to face HMRC scrutiny," he says.
Are you worried about the Etsy, eBay, Vinted, etc. sales tax – I hope I can put your mind at rest.
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If you’re unsure how many items you’ve sold or how much money you’ve made so far, then it’s best to go back and find your detailed sale records. Also keep track of any expenses that’ve gone with the sales; stamps, postage materials and courier payments, as you could get some of this back when the time comes to doing your Self-Assessment tax form.”
Can you sell phones on Vinted?
Meanwhile, following a spike in people selling their phones on Vinted, experts at Compare and Recycle have issued advice on re-selling tech. This comes after a 63% increase in the number of people searching for “can you sell phones on Vinted” over the past year.
And while previous research from Which? shows that Vinted is a go-to second-hand marketplace in the UK, sites like these may not be the best option for selling tech, warns Antonia Hristov, Head of Marketing at the mobile phone recycling comparison site Compare and Recycle.
While Vinted does have an Electronics Verification service, it comes at an additional cost of £5 and only covers the functionality, condition, attributes, and authenticity of devices.
Without paying for it, Antonia explains that there’s no way to ensure the device you’ve purchased will arrive as claimed by the seller.
Concerningly, the same research from Which? shows that a third of buyers and a fifth of sellers have experienced a marketplace scam in the past two years.
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“Buyers could also be at risk of buying a device that is still under finance," she says.
“Doing so could mean the phone might be locked to a specific network, and if the previous owner stops making their monthly payments, the phone would likely be blacklisted using the IMEI number by the lender.
“Similarly, sellers could be at risk of personal data being left on a device if the seller fails to perform data erasure, which will mean that buyers won’t be able to have full access to the device, and the seller could potentially be exposed to data misuse."
To avoid any potential issues with selling tech, Antonia advises that: “Peer-to-peer sales can be great with low-risk items like clothing, but for tech, it’s always best to use specialist tech recycling companies like those listed on Compare and Recycle.
“While selling on marketplaces like Vinted might seem convenient - especially if you’re a frequent user - choosing a tech recycling site for selling second-hand devices is a better option because it is low effort for the seller and recyclers verify, test, and securely erase data, without hidden or additional protection fees.”
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