Do you sell on eBay? You might need to declare this
3rd Mar 2017
Selling a few old things in your home on eBay is a good way to make an extra bit of cash. And if you’re savvy, you can even turn this into a little business – picking up clothes or furniture for cheap from car boot sales and selling them online for a small profit.
But if you do this, do you need to let the tax man know about it? Yes, you will as it’s still technically income – so you need to pay Income Tax on it. We’ll take you through how this works, what HMRC can do to check up on you – and how the rules are set to change from April.
It’s classed as income
As you’re earning money from selling things through eBay, you are meant to register as self-employed and pay Income Tax on your earnings. If you also work another job, this can mean you end up having to pay quite a bit in Income Tax.
If you’re not planning to earn a lot by selling through eBay, the hassle of registering as self-employed and having to pay tax might put you off from bothering to do it. But don’t think you can get away with not paying Income tax if you have to – HMRC can check up on you.
Since September 2016, HMRC has had the power to quietly check up on people selling on eBay and other marketplace sites to see if they should be paying Income Tax. And if it looks like you might be avoiding paying tax, they can get in touch with you to tell you to pay up.
What’s changing soon?
But the rules around paying tax on eBay are set to change from April. That’s because of the two new tax breaks due to start then – the Airbnb tax break and the trading income tax break.
You can now earn £1,000 a year from renting out rooms in your home or your whole property short-term, and you can earn another £1,000 a year from trading income – this is where the eBay selling comes in. As long as you earn under these thresholds, you won’t have to pay any tax on your earnings and you won’t even have to declare it.
And trading income doesn’t only mean selling on eBay either. If you make jewellery at home and sell it on Etsy, offer a gardening service to your neighbours or are even taking up a part-time cleaning job, you might not have to pay tax on this – as long as you earned less than £1,000 a year from it.
If you’re an aspiring chef, you could even make a bit of extra cash selling your meals – find out how you can this through the Quertes app with our blog.
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