Digital platforms will soon be expected to pass on sales data and personal information to HMRC.
Who Does this Apply to?
Digital platforms must share their sales data and some personal information for 2024 with HMRC by the end of January 2025. The information that these digital platforms will have to collect includes how many sales you have made and how much income you have generated.
Your platform provider will let you know if your information has been shared with HMRC. Your information will be shared if you have sold at least 30 items or earned around £1,7000 using platforms like Vinted, eBay or Depop, or provided a paid-for service on a website or app, such as renting a home through Airbnb or delivering takeaways with through Just Eat. This means that your information will not automatically be shared if you only sell a small number of goods for smaller amounts of money.
Does This Change the Tax I Pay?
These new reporting requirements do not constitute a new tax for sellers, and the sharing of this sales data does not mean you necessarily need to complete a tax return.
However, it has always been the case that some people trading goods or services through online platforms will need to register for a Self Assessment and pay tax. If you are unsure whether any additional income you are receiving could be taxable, you can check here.
“We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due.
As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for Self Assessment.” – Angela MacDonald, HMRC’S Second Permanent Secretary and Deputy Chief Executive Officer
Essentially, if you are a casual seller who gets rid of some old or unwanted clothes from time-to-time, doing so remains untaxed. You will only be taxed on this kind of income if you are considered to be trading. So, if you didn’t owe any tax on these earnings before, and continue to use these digital platforms in the same way, you still will not owe anything.
What Do These Changes Mean for Me?
These changes will not affect your tax or the way you buy and sell items on digital platforms.
The changes mean it will be easier for HMRC to find out what you are making through selling on digital platforms, but if you check what tax (if any) you owe and take the steps to pay it, you should have no problems.
The change means that HMRC can also share this data with tax authorities from other countries that signed up to these new rules by the Organisation for Economic Co-operation and Development.