HMRC warning as Vinted, eBay and other apps subject to new 'side hustle' tax rules

People who use selling apps such as Vinted and eBay are being reminded of new tax rules that came into force earlier this year.

HM Revenue and Customs (HMRC) is urging people to check whether they need to submit a self assessment tax return as the deadline to register approaches. According to the gov.uk website: "You must tell HMRC by 5 October if you need to complete a tax return and you have not sent one before. You could be fined if you do not."

Those who may need to submit a tax return include anyone who has earned more than £1,000 through a 'side-hustle'. Side hustles include selling items on popular apps such as Vinted and eBay, as well as renting out spare rooms through apps like AirBnB.

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The reminder comes after HMRC introduced new rules for side hustle platforms at the start of 2024. From January 1, digital platforms such as eBay, Airbnb, Etsy, Amazon and Vinted have been required to share seller information, including the number of sales made and amount of money earned, with HMRC.

Previously, many sellers would have been unaware of the requirement to declare their earnings, but the new rules around information sharing aim to crackdown on traders earning significant sums of money from such platforms.

The threshold for earnings from so-called online side hustles is set at more than £1,000 a year – above this, online sellers may have to register as self-employed and file a self-assessment tax return at the end of the financial year.

Whether you pay income tax on the earnings or not depends on whether you are considered to be trading. People who sell old unwanted items are likely not be classed as traders. However, if you are buying items and reselling them to make a profit, that would be considered as trading.

If you make less than £1,000, your earnings will be covered by the 'trading allowance', which entitles you to earn up to £1,000 tax-free without having to report the income to HMRC or pay any income tax on it.

In a reminder on social media, HMRC said: "Check if you need to register for Self Assessment by 5 October. You might need to if you: Have earned more than £1,000 through a side-hustle. Are newly self-employed. Rent out a property."

The October 5 deadline is for people who have not submitted a tax return before and need to register. The deadline to submit your online tax return once you have registered is midnight on January 31.

According to the gov.uk website you must send a tax return for the last tax year if any of the following applies:

• you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
• you were a partner in a business partnership
• you had a total taxable income of more than £150,000
• you had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
• you had to pay the High Income Child Benefit Charge

You may also need to send a tax return if you have any untaxed income, such as:

• money from renting out a property
• tips and commission
• income from savings, investments and dividends
• foreign income

If you are unsure, you can use the gov.uk's online tool to check whether you need to submit a tax return.