New tax rules for eBay, Vinted, and Depop effective next month
- HMRC's new regulations mandate online platforms to report sellers' income to the tax authority.
- Sellers who frequently sell items for profit may need to register for self-assessment by October 5.
- This initiative aims to improve tax compliance and simplify the reporting process for online sellers.
In 2023, HMRC implemented new regulations requiring online platforms like eBay, Vinted, and Airbnb to track and report sellers' income directly to the tax authority. This change marks a significant shift from previous practices where HMRC had to request access to such information. The deadline for these platforms to report income is set for January 2025. Sellers who frequently engage in online sales may receive notifications from these platforms regarding their tax obligations. However, not all sellers will be required to pay taxes, particularly those selling unwanted household items. The distinction lies in whether the seller is considered to be 'trading' for profit, which would necessitate tax registration. For those who do need to register, the deadline for self-assessment registration is October 5 for the 2023/24 tax year. Registration can be completed online or via a helpline, and a Unique Taxpayer Reference (UTR) will be issued, which may take up to 10 working days to arrive by post. This new framework aims to enhance tax compliance among online sellers and streamline the reporting process for HMRC.