Quick answer
You pay tax on Etsy, eBay or Vinted sales if you are trading, for example buying to resell or making items for profit, and your income is over £1,000 in a year. Selling your own unwanted items usually does not count as trading.
Updated October 2026 · Figures based on 2026/27 rates
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Trading or clearing out?
HMRC looks at whether you make items to sell, buy to resell, sell regularly and aim to profit. Occasional sales of personal belongings are normally not taxable.
Platform reporting
Online platforms must report seller income to HMRC, including numbers of sales and total earnings, so HMRC can see your activity.
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What to do if trading
Register for Self Assessment if gross income exceeds £1,000, record sales and costs, and claim expenses such as materials, postage and fees.
Capital gains
If you sell a personal item for a profit above £6,000 per item, capital gains rules may apply, with exemptions for many chattels.
Selling your own things versus trading
Clearing out a wardrobe on Vinted or selling an old games console on eBay is generally not taxable trading. People usually sell personal belongings for less than they paid, and these are not seen as a business. The picture changes if you buy items in order to resell them, make goods to sell, or sell regularly with a view to profit. HMRC looks at the whole pattern, sometimes called the badges of trade: how often you sell, whether you bought stock to resell, how you present the activity, and whether you keep working at it. If you are trading, the profit counts as self-employed income and may need to go on a Self Assessment return.
Platforms may report to HMRC
Online marketplaces are now required to collect and share certain seller information with tax authorities, including HMRC. This does not mean you are in trouble, but it does mean your sales are visible, so it makes sense to keep accurate records and declare income that is taxable. Check HMRC guidance on exactly what platforms report and when.
The £1,000 trading allowance
If your gross trading income from all small self-employed activities in a tax year is £1,000 or less, the trading allowance normally covers it and you do not need to register or report it. Gross means total sales before costs, so £1,001 of sales is over the limit even if your profit is small. Above £1,000, you can either deduct the £1,000 allowance from your income or deduct your actual costs, whichever gives the lower profit. You cannot do both. Costs for craft sellers include materials, platform fees, packaging, postage and a share of workspace costs where appropriate.
Worked example: a craft seller on Etsy
This is an illustrative example using 2026/27 rates. Someone with a salary of £28,000 sells handmade items online with total sales of £4,500. Their costs are materials £800, platform fees £250 and postage £250, a total of £1,300.
| Method | Working | Profit |
|---|---|---|
| Trading allowance | £4,500 – £1,000 | £3,500 |
| Actual expenses | £4,500 – £1,300 | £3,200 |
Actual expenses give the lower profit, so they are the better choice. Because the salary already uses the Personal Allowance, the extra profit is taxed at 20%: £3,200 x 20% = £640. If they had used the allowance instead, the tax would have been £3,500 x 20% = £700.
Class 4 National Insurance applies to profits above £12,570, so none is due here. Because the profit is below the Small Profits Threshold, no Class 2 is treated as paid — but the person can choose to pay voluntary Class 2, a flat weekly rate set by HMRC each year, to protect State Pension entitlement. Check current HMRC guidance for this year’s rate before deciding.
Registering and filing
If your trading income is above £1,000 and you are not covered by an exemption, register for Self Assessment by 5 October after the end of the tax year in which you started. File online and pay any tax by 31 January. If you missed the date, our guide to registering for Self Assessment explains what to do. For more on profit calculations, see how to calculate self-employed profit. If your sales are from video platforms rather than marketplaces, see our guide to tax for content creators and influencers.
Common mistakes
- Ignoring sales because they are on a platform, not a shop.
- Comparing profit rather than gross income to the £1,000 allowance.
- Claiming the allowance and costs together.
- Not keeping records of purchases, fees and postage.
- Assuming the platform’s payout figure equals your taxable income, when fees may have been deducted before payout.
- Waiting until after 5 October to register.
Practical checklist
- Export your sales history for the tax year from each platform.
- Total gross sales across all platforms.
- Collect receipts for materials, fees, postage and packaging.
- Compare the trading allowance with actual costs.
- Register for Self Assessment if needed, then file by 31 January.
How SATR can help
SATR, a trading style of Accotax, has qualified UK accountants who prepare online sellers’ returns and file online for a fixed fee from £199 + VAT. See Self Assessment for sole traders, or order online.
This article is general information, not personal tax advice.
Keeping records as an online seller
Sellers often rely on platform dashboards, but those can change or disappear, so download your own copies. For each tax year, keep a sales report, payout statements, receipts for materials or stock, postage labels, and bank statements showing the money received. Keep personal and business spending separate where you can, for example with a dedicated bank account, because it makes the return far easier to prepare. Records should be kept for five years after the 31 January deadline for that tax year. If you sell both new stock and second-hand items, record which is which. If your income is growing, also read our guide to who needs to file a Self Assessment tax return to check you are not missing other reasons to file.
Frequently asked questions
Will HMRC know about my sales?
Yes. Platforms share data on sellers with HMRC under the digital platform reporting rules.
Can I claim postage and packaging?
Yes, these are allowable expenses for trading income.
Do I pay tax on items I sell on Vinted or eBay?
Not usually if you are selling your own unwanted belongings. If you buy to resell, make items to sell or trade regularly for profit, the income may be taxable. Check current HMRC guidance.
What if my sales are only slightly over £1,000?
You normally need to register and report, but you can deduct either the £1,000 allowance or your actual costs, so the tax may be small.
Do I have to tell HMRC if I only sell part-time?
If your gross trading income is over £1,000 in a tax year, you generally need to register for Self Assessment, even if the activity is only a side hustle.
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The bottom line
Selling your own unwanted items is not trading and usually needs no tax return — but once you buy to resell, make items to sell or sell regularly for profit, you are trading and the £1,000 trading allowance decides whether you must register. Above £1,000 of gross sales, compare the allowance with your actual costs, keep proper records, and file by 31 January.
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