From 1 January 2024, digital platforms like Vinted, eBay and Etsy, will have to start collecting seller data and pass that over to HMRC to match against taxpayers’ records to make sure people report the right information on their tax returns.
Brought in to allow HMRC to find out more about potential untaxed income, this will impact millions of UK individuals who sell second hand items online as well as renting out properties, like Airbnb, or people selling their services online.
The first reporting deadline is 31 January 2025 and there will be fines and penalties applied to those who fail to submit reports, or submit ‘inaccurate, incomplete, unverified sellers’ records’ so digital platforms will need to implement new ways of collecting seller information in the New Year to ensure they meet their reporting obligations.
Sellers who receive £1,700 or less from fewer than 30 sales in a reporting period need not have their information provided to HMRC, however there may still be tax reporting obligations. If you make sales of £1,000 or more in a year, you will need to file a Self Assessment tax return and pay Income Tax and National Insurance contributions accordingly.
This could bring a new wave of individuals to HMRC’s attention who previously were unaware of their potential tax implications of giving their unwanted Christmas gifts a new lease of life.
If you need assistance with your tax return, or any other tax related matter, please get in touch with our Tax Experts by calling one of our offices or emailing taxation@eqaccountants.co.uk.