Selling on Vinted could see Brits hit with hefty fines after HMRC rule change

Thousands of Brits earning money from side hustles could be hit with fines next year if they haven’t declared the income to HMRC.

From January 1st 2024, platforms will be required to collect data on how much users make, which they must then report directly to HMRC. It means Vinted, Depop and Etsy sellers are now being warned ahead of the New Year, to ensure they remember to report any income made as part of their Self Assessment. If they don’t, HMRC could find out anyway with earnings information being shared directly from the platform and linked to their selling accounts.

For many Brits they might not realise selling on their second hand wardrobe or unwanted handbags, baby clothes or trainers could leave them open to fines. HMRC rules allow for any income below £1000 in a year to be seen as ‘casual income’ which can remain undeclared, but if that is exceeded then earnings can be viewed as trading which need to be declared and income tax and National Insurance (NI) contributions paid.

Mike Parkes, Technical Director at GoSimpleTax, said: “Selling via platforms like Vinted, Etsy and Depop can be a great way to earn an extra income and often that falls below the casual income bracket. Yet for some it can quickly add up and those earning above this will still need to pay tax on what they earn.

“Earning £1000 in a year might seem like a large amount, but that can easily be exceeded if you earn more than £84 a month across a year. Selling large items, second hand designer clothes and accessories or even unwanted baby clothes could see this capped amount of casual income easily be met, and many won’t realise that they need to be liable for tax and income payments to HMRC if they earn above this limit set by the Government.

“Putting money aside for tax throughout the year is the best way to ensure you’ll be prepared for when it’s time to complete a self assessment tax return, which is due by January 31st. That isn’t always the case though, and rather than ignoring what you owe now is the time to take control of finances and ensure you won’t have missed paying tax if you need to.”

He continued: “With the countdown ticking until the deadline, it can seem daunting to pay tax if money isn’t set aside but there are always options available and the earlier you can start considering them, the better off you will be. The first is to get an up to date calculation of what is owed and then to understand what you do have to put towards it as well as what you can pay in January.

“Once you have a clear guide on this, you can then look at what options are available with HMRC such as a time to pay plan, allowing you to pay the tax owed but across feasible and manageable monthly payments.”