There could be a risk that you owe extra tax
HM Revenue and Customs (HMRC) has issued a reminder to anyone with “unwanted” Christmas presents. Brits should “check” the tax rules on selling items to make sure they don’t owe any extra tax.
During the festive season you may receive gifts that you’re not keen on. Maybe you already have one, or you’re not sure you’ll ever use it.
Some people may even decide to sell these gifts on, rather than storing them away. However, before you do you need to be sure you’re not breaking any tax rules.
In a post made to social media platform X, HMRC highlighted its guidelines on selling items online. Although it explained that in most cases you won’t need to pay tax, it’s still worth checking.
HMRC said: “Unwanted Christmas gifts? If you plan to sell your own personal items, such as used clothes or an old TV, you don’t need to pay income tax on this.”
It then directed people to a website for further details. Here it said: “If you’re just selling unwanted personal belongings from time to time, you probably don’t need to tell HMRC but it’s a good idea to check to make sure.
“From online selling and tutoring, to delivery work and dog walking, there are lots of ways you might make money outside your main job. But did you realise there are tax rules for side hustles that everyone has to follow?”
A key rule is that if you make more than £1,000 from a “side hustle” you will need to tell HMRC. It said: “Whether you get cash in hand or money paid straight to your bank account, you’ll need to tell HMRC so you can avoid any tax surprises”.
If you earn more than £1,000
This is classed as money that is on top of your main job. GOV.UK said: “Earned more than £1,000 on top of your main job in the last tax year?
“If it’s from making or buying things to sell for a profit, as well as any other side hustles, you’ll need to tell us. The tax year runs from 6 April to 5 April.
“This is the amount you earn before factoring in expenses. It is not the same as profit.
“You may have to pay tax on money you made from side hustles if your total income, including your main job, was above the basic personal allowance of £12,570.”
If you made £1,000 or less you don’t need to let HMRC know about that.
Examples of selling you might need to tell HMRC about
You might need to alert HMRC if:
- You buy items from car boot sales or charity shops with the intention to sell them for more money than you paid for them
- You upcycle second-hand pieces of furniture as a hobby with the intention to sell them
- You make greetings cards which you sell online
- You buy wholesale bundles of vintage clothing which you then resell individually through online selling platforms or apps to make a profit
- You do a few digital design side hustles. You sell downloadable wall art, images people can use to screen print t-shirts, and bespoke pet portraits
Selling personal belongings
However, if you’re just selling unwanted personal belongings from time to time like old toys and clothes, whether it’s online or in person, you don’t usually need to tell HMRC. Therefore, most people won’t need to tell HMRC if they’re selling on some unwanted gifts.
HMRC said: “It’s only if you’ve sold a single personal item or collection for more than £6,000 that you need to tell us.”
This is because you might have to pay something called Capital Gains Tax. For more information, visit the Government website here.
