HMRC is introducing a new ‘simplified’ tax system to make it easier for individuals to report income earned from selling on online platforms like eBay
A simpler method for reporting earnings is set to be introduced for many people using online platforms like eBay or Vinted to earn extra income. At present, anyone making an additional £1,000 in a tax year has to deal with the intricacies of a self-assessment tax form.
However, there are discussions about raising this limit to £3,000, according to reports. By 2029, a more accessible online declaration form is anticipated for those earning under £3,000, which will greatly ease the process for many, as reported by the Daily Record.
This upcoming change is expected to relieve approximately 300,000 individuals from the cumbersome self-assessment process. While tax obligations will remain the same, the method of reporting income to HM Revenue & Customs (HMRC) will be simplified.
For those casually selling personal items from home, there’s no need to worry about taxes—unless you start operating like a business and earn more than £1,000 a year, which would then require tax reporting as per HMRC guidelines. Tax Minister James Murray highlighted the importance of adapting to modern times when he spoke to The Sun.
He said: “From selling old games to creating content on social media, we are transforming how HMRC operates to help Brits fully embrace their entrepreneurial spirit.” In a bid to modernize the tax system and reduce administrative burdens, the government is adopting this new approach, which is likely to be well-received by many who are increasing their income through innovative side ventures.
“Taking hundreds of thousands of people out of filing tax returns means less time filling out forms and more time for them to grow their side hustle. We are going further and faster to overhaul the way HMRC works to make sure it delivers the Plan for Change that will help put more money in people’s pockets.”
New regulations now require online marketplaces such as eBay and Vinted to directly share transaction information with HMRC, moving away from the previous system where HMRC had to request this data. If you’ve sold at least thirty items, earned around £1,700 (approximately €2,000), or offered paid services through an online platform in 2024, you can expect to be notified that your sales information and some personal details will be sent to HMRC.
It’s important to note that this does not automatically mean you owe taxes; it depends on whether your activities are classified as trading. If you’re unsure about your situation, you can find helpful advice and guidelines on GOV.UK.
Additionally, there may be other circumstances that still require you to complete a self-assessment form, including:
