HMRC Online Seller Tax Warning: eBay and Vinted Letters

Since January 2024, websites and apps that connect sellers with buyers have had to collect details of many of the people selling through them and report those details, with their earnings, to HMRC once a year. The first reports reached HMRC in January 2025. News coverage often calls this an HMRC tax warning for online sellers, but the rules did not create a new tax. HMRC said at the time that people occasionally selling unwanted items face no new tax obligations.

What has changed is how much HMRC can see. If you sell regularly on eBay, Vinted or Etsy, take work through an app, let a home or a room through Airbnb, or earn money as a content creator, this guide explains what is reported, when the income is taxable, and what to do if HMRC writes to you about it.

What changed: online platforms now report sellers to HMRC

The rules are in the Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023, which brought the OECD’s model reporting rules for digital platforms into UK law from 1 January 2024. They apply to platforms that arrange four kinds of activity for payment:

selling goods, which means physical items
personal services: work paid by the time it takes or the task done, carried out by people at a customer’s request, online or in person. HMRC’s examples include taxi and delivery work, online work such as copywriting and data entry, tutoring and other freelance work, cleaning, gardening, and event and catering work.
renting out property
renting out a means of transport, such as a car

Platforms gather the information over each calendar year and send it to HMRC by 31 January the following year. For an individual seller, the platform asks for your full name, home address, date of birth and, if you live in the UK, your National Insurance number, and reports those details together with what you earned through it.

The platform must also give you a copy of what it reported, showing your earnings for each quarter after any fees or commission it took. Keep it: it is the starting point for checking your position.

Which sellers are not reported?

There is one exclusion for small sellers, and it applies only to goods. A platform does not report someone who sold goods through it fewer than 30 times and received no more than €2,000 (about £1,700) for them in the calendar year. Both tests must be met. A seller with 30 or more sales, or more than €2,000 of sales, is reported, even if every item was an unwanted possession sold for less than it cost.

There is no small-seller exclusion for services or rentals. Those are reportable whatever the amount.

Being reported does not mean you owe tax. HMRC’s own guidance says that receiving a copy of the platform’s report does not mean tax is due. Whether it is depends on what the income was.

Is this DAC7?

DAC7 is the name of the European Union’s rules requiring digital platforms to report information about their sellers, which EU countries have applied since 1 January 2023. The UK, outside the EU, has its own regulations, based on the OECD’s model rules.

HMRC exchanges platform information with partner countries that have agreed to it, so if you live abroad HMRC can pass your details to your own tax authority, and information about a UK seller can reach HMRC from abroad in the same way.

Selling your own things, or trading?

Most people who sell online are not trading. HMRC’s guidance is that selling personal possessions, such as clothes you no longer wear or things cleared out of the loft, is unlikely to be taxable.

The position changes if you are trading: buying things in order to sell them at a profit, or making things to sell. HMRC gives both as signs that you are likely to be trading, and the profit is then taxable.

Where the line falls depends on the whole picture. HMRC’s Business Income Manual lists nine badges of trade. In plain terms, they ask:

Did you buy or make the item intending to sell it at a profit?
How many sales are there: a one-off, or a regular pattern?
What kind of item is it: something you used and enjoyed, or stock?
Is it connected with a business you already run?
Did you repair, improve or repackage it to make it easier to sell?
Did you sell it the way a business would, for example with advertising?
Did you borrow money to buy it?
How long did you keep it before selling?
How did you come by it: bought, made, inherited or given?

No single badge settles the question. HMRC’s manual says the courts decide on the overall impression the badges give together.

Separately, selling a single possession for more than £6,000 can bring capital gains tax into play, and the same limit applies to a set of items such as matching ornaments. A car, and anything with a limited life such as a clock, is generally exempt unless it was used in a business.

An illustration

These figures are invented. Someone clears out a wardrobe and sells 40 items of their own clothing on Vinted in a year for £600. Because there were 30 or more sales, the platform reports them. But nothing here looks like trading, and selling your own used clothes for less than you paid is unlikely to produce any tax.

Someone else buys clothes at car boot sales most weekends, cleans and photographs them, and sells them on eBay for £5,000 in a year. That shows several badges of trade: items bought to resell, many sales, a quick turnaround. The receipts are above £1,000, so a Self Assessment return is likely to be needed, as the next section explains.

The £1,000 trading allowance, and when Self Assessment is needed

HMRC’s own campaign calls this kind of income a side hustle. Each individual has a trading allowance of £1,000 a tax year (6 April to 5 April). It is one allowance shared across all side income from selling, services and content creation, not £1,000 for each platform.

If your total receipts are £1,000 or less in the tax year, before deducting any costs, the allowance covers them and you do not need to tell HMRC.
If they are more than £1,000, you need to register for Self Assessment by 5 October after the end of the tax year and report the income. You can then deduct either your actual costs or the £1,000 allowance, whichever is better, but not both.

The allowance cannot be used for income from a partnership, from your employer or your spouse’s or civil partner’s employer, or from a company that you or someone connected with you owns or controls.

The government has announced a simpler online service for people with side income between £1,000 and £3,000, which HMRC says is on the way by 2029. Until it exists, the route is a Self Assessment return.

Larger sellers should also check Making Tax Digital for Income Tax. Since 6 April 2026 it has applied to sole traders and landlords whose qualifying income in 2024-25 was more than £50,000, and from April 2027 the threshold falls to £30,000.

Content creators and influencers

Income from creating content on subscription and social platforms is taxed in the same way. HMRC’s guidance counts fees for sponsored posts and brand partnerships, advertising revenue from your videos, and the value of products you are given and keep in return for promoting them. Income from subscribers and tips is part of the same activity.

The same single £1,000 trading allowance applies, shared with any other side income, and above it you need to register for Self Assessment. HMRC’s guidance is clear that this applies even if you think of content creation as a hobby.

Is creator income reported under the platform rules?

Not always. The reporting rules cover sales of physical goods and personal services, which means work done at a particular customer’s request. The OECD’s published guidance on its model rules says that giving people access to pre-recorded content that was not made for them individually, such as videos, courses or music, is not a personal service. Work made to order for a particular customer can be. Digital downloads are not “goods” either, because that term covers physical items only.

So a creator may not appear in any platform’s report. That does not make the income invisible, or tax-free. HMRC says it uses a range of third-party data to find unpaid tax, and it has written specifically to people it believes have earned money from creating content on digital platforms without declaring all of it.

Renting through Airbnb and other platforms

Short-term and holiday lets arranged through platforms fall within the reporting rules, with no small-seller exclusion. The income is usually property income rather than trading income, and it has its own, separate £1,000 property allowance. Letting a room in your own home may instead come under the Rent a Room scheme.

Where rental income has gone undeclared, HMRC’s route for individual landlords to put it right is the Let Property Campaign, which covers residential property in the UK or abroad, including holiday lets. See our page on the Let Property Campaign.

HMRC letters about income from online platforms

HMRC says it uses what platforms report to check that income has been declared. It also sends what it calls “one to many” letters: the same letter to a group of people its data picks out, asking them to check their position.

Letters HMRC has used in these campaigns carry headings such as Income you have earned from Online Marketplace sales and Income you have earned from creating content on digital platforms. They say HMRC has information showing you earned that income, and that you have not told it about some or all of it. They enclose a certificate of tax position asking you to tick one of three statements:

that you will bring your tax affairs up to date through HMRC’s Digital Disclosure Service
that you believe you have declared everything, giving the tax years and the boxes used
that you have not declared the income, and why

The certificate ends with a declaration that dishonestly making a false statement is a criminal offence, and the letter asks for a reply by a set date, about a month away.

Whether it is an eBay letter or one about Vinted, Etsy or a content platform, a letter like this is not a formal enquiry. But it tells you HMRC holds data about you, and ignoring it is a poor option: HMRC can follow it with a formal enquiry or an information notice, and those carry legal obligations and deadlines.

What to do if one arrives

Check what kind of letter it is. A letter that cites legislation, opens an enquiry into a return or demands documents by a deadline is not a nudge letter. See identifying your HMRC letter, compliance checks and information notices.
Do not sign the certificate yet. It is a declaration to HMRC. Our guide to nudge letters and the certificate of tax position explains why it deserves care.
Gather the records. The annual copy each platform sent you, your sales history, receipts for anything you bought to sell, and statements for the account the platform paid into.
Work through each tax year. Platforms report by calendar year and HMRC works by tax year, so the figures need splitting; the quarterly breakdown helps. Separate personal possessions from anything bought or made to sell, add up receipts across every platform, and compare the total with the £1,000 allowance.
If tax is owed, the usual route is a disclosure through HMRC’s Digital Disclosure Service, covering every year that is open. See voluntary disclosures.
If nothing is owed, it is usually better to tell HMRC so, with the reason, than to stay silent: for example, that the sales were personal possessions, or that receipts stayed under £1,000.

Correcting past years

If income from selling, services or content should have been reported in earlier years and was not, the correction normally goes through HMRC’s Digital Disclosure Service. You notify HMRC first, then have 90 days from its acknowledgement to work out and pay what is owed.

How many years the disclosure covers depends on why the income was missed: broadly four years where reasonable care was taken, six where it was careless, and up to twenty where it was deliberate or where someone who should have registered for Self Assessment did not. See how far back HMRC can investigate.

Penalties depend on the behaviour behind the error and on whether the disclosure was prompted, and failing to register when you should have is a separate failure with its own penalty. Our guide to careless and deliberate penalties explains the ranges, and the penalty calculator gives an estimate. Interest also runs on tax paid late. If the total cannot be paid at once, HMRC can agree a Time to Pay arrangement.

For undeclared rent, the Let Property Campaign is the usual route.

Frequently asked questions

Does HMRC know what I sell on eBay or Vinted?

If you made 30 or more sales of goods on a platform in a calendar year, or received more than €2,000 (about £1,700) for them, the platform will have reported your details and earnings to HMRC, starting with sales made in 2024. If you sold only goods and stayed below both limits, it will not have reported you. Either way, the report is information, not a tax bill.

Do I have to pay tax on selling my old clothes on Vinted?

Usually not. Selling your own used possessions is unlikely to be taxable, even if the platform reports you. It is different if you buy or make things to sell at a profit.

Do I need to tell HMRC about my side hustle?

If your receipts from selling, services and content creation together are more than £1,000 in a tax year, before costs, you need to register for Self Assessment by 5 October after the tax year ends. At or below £1,000, the trading allowance usually covers it.

Is income from content creation reported to HMRC?

Sometimes. Platforms report personal services done at a customer’s request, but the OECD’s guidance says access to pre-recorded content that is the same for everyone is not a personal service. The income is taxable whether or not a platform reports it.

I have had an HMRC letter about online selling. Do I have to reply?

A “one to many” letter does not usually create a legal duty to reply, but ignoring it is a poor option. Check whether anything is owed before you respond, and do not sign a certificate of tax position until you have.

What is DAC7?

DAC7 is the EU’s set of rules requiring digital platforms to report their sellers to tax authorities, in place in EU countries since 2023. The UK has its own equivalent rules, which have applied since 1 January 2024.

If a letter has arrived and you are not sure what it is, start with identifying your HMRC letter, or contact us with a photo of page one.

Sources

The Platform Operators (Due Diligence and Reporting Requirements) Regulations 2023 (SI 2023/817), and its Explanatory Memorandum
OECD, Model Reporting Rules for Digital Platforms, and the OECD’s frequently asked questions on them (updated October 2023)
HMRC, International Exchange of Information Manual, IEIM900100, IEIM901510, IEIM901630 and IEIM906000
HMRC, “Reporting rules for digital platforms”, “Selling goods or services on a digital platform”, “Check if you need to tell HMRC about your income from online platforms” and “Tax-free allowances on property and trading income” (GOV.UK)
Council Directive (EU) 2021/514 (DAC7)
HMRC, Tax help for hustles (campaign site)
HMRC Business Income Manual, BIM20205 (badges of trade)
Income Tax (Trading and Other Income) Act 2005, sections 783AD and 783BD; Taxation of Chargeable Gains Act 1992, section 262
HMRC, “Let Property Campaign: your guide to making a disclosure” (GOV.UK)
HMRC one to many letters on income from online marketplace sales and from creating content on digital platforms

This guide is general information, not advice on any particular case.

HMRC letters to online sellers and content creators