The side hustle tax warning everyone is talking about - and why you probably don't need to panic

If you’ve sold a few bits on Vinted to make room in your wardrobe or generate a bit of extra cash, you’re not alone. Reselling has become a way of life for many of us, whether it’s to clear clutter, promote sustainable fashion by putting something back in circulation, or even an effort to turn a hobby into something more regular.

But a flurry of headlines about HMRC cracking down on sellers on platforms like Vinted, eBay and Etsy has got a lot of people wondering if a tax bill might be coming their way.

If you’re worrying that you might be accidentally breaking the law, we’re here to break it down for you.

What’s actually changed?

HMRC now has visibility into how much people are making on online platforms. That’s because sites like Vinted, Etsy, eBay, and even Airbnb now have to report sellers’ data to HMRC under new international transparency rules.

But here’s the bit that matters. They only have to report it if:

• you’ve made over £1,700 in sales on Vinted

or

• completed more than 30 transactions in a year

And even then, this doesn’t mean you automatically owe tax.

Do I need to panic if I’ve sold a few things?

No. If you’re selling unwanted personal items (think clothes that no longer fit or last year’s Christmas gift set), then HMRC isn’t interested. That’s not trading, that’s decluttering.

Where it can become taxable is if you’re doing something more structured, like flipping items for profit, buying stock to resell, or making and selling crafts regularly.

If you earn more than £1,000 in profit from this kind of activity in a year, that’s when you need to let HMRC know and file a self-assessment tax return.

What if I’m not sure how much I’ve made?

If you think you might be close to the £1,000 threshold, now’s the time to get your records in order. Go back through your sales history on the platforms you use and check how many sales you’ve made and how much money you’ve brought in.

You can deduct certain expenses too, like postage, packaging, and materials. So keep hold of receipts and make notes now to make your life easier come tax time.

I think I need to file a tax return. What now?

The self-assessment deadline is 31 January and it’s best not to leave it until the last minute. You can file online at gov.uk, and if you need help, contact HMRC as early in the day as possible to avoid long waiting times – this is a party that people love to come late to, so the lines get really busy as we go deeper into January.

If you miss the deadline, there’s a £100 fine straight away, followed by daily penalties, interest charges, and bigger fines the longer it goes unpaid.

If you owe tax and can’t pay it all at once, HMRC offers a Time to Pay service that lets you set up a payment plan, as long as you owe less than £30,000 and meet the criteria.

Final word? Keep calm and carry on selling (within reason)

If your side hustle is growing into a business, it’s brilliant that you’re making it work for you. Just keep yourself by making sure you’re keeping on top of the admin too.

And if it’s just a few sales here and there? Keep your receipts, stay under the threshold, and don’t let scary headlines put you off turning clutter into cash.