Apps that allow people to earn extra cash could require tax to be paid on top (Image: Getty)
If you’ve recently been clearing out your home with the help of eBay or Vinted, you’ll likely have earned some extra cash along the way. However, some sellers might have to know how this impacts their tax payments.
Lots of information has been circulating about the tax you might need to pay based on what and how much you’re selling. Martin Lewis and his Money Saving Expert team offer some concrete advice that should relieve many app users.
As of January 2024, these “digital platforms,” which also include other side hustle apps like Etsy, Deliveroo, and Uber, are required to collect information from sellers about the amount they’ve made and the amount they’ve sold.
This tax rules aren’t new, they just give more visibility of your income from these online platforms. Platforms will need to start sharing this with from later this week (January 31, 2025).
What you’ll need to watch out for is the trading allowance. This is a tax exemption that allows you to make up to £1,000 working for yourself each tax year without having to declare these earnings to .
Here’s what you need to know about tax if you’re selling (Image: Getty)
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- Self-employment: for example, as a sole trader, freelancer or independent contractor
- Casual work: for example, tutoring, pet sitting, gardening
- Side hustles: including online content creation
- Selling goods online with the intention of making a profit: buying or making items specifically to sell them on (NOT just having a clear-out
You’ll need to (even if you made less than £1,000 from doing each one separately). When filing, you can either use the trading allowance to reduce your income by £1,000.
If you’ve only been using Vinted or eBay sparingly to have a quick sort-out in your home, then chances are you’re not going to need to worry too much. If you only sold unwanted items you already owned, it’s usually not trading.
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In almost all cases, if you just flogged stuff you already had lying around, you don’t need to tell or pay any tax on this. The one exception is if you sold a single item for £6,000 or more. Depending on what it was, you may need to tell and pay Capital Gains Tax (CGT).
This may apply if you sold something that has increased in value since you got it, such as jewellery, antiques and paintings.
if you rent out property using apps like Airbnb and provide a service through the likes of Uber and Just Eat. There’s also some information to be aware of if you’ve started out into the world of online content creation through social media and podcasting.