UK Etsy / Vinted Seller Tax (2026/27)
Etsy, Vinted and eBay seller tax 2026/27: platform reporting since January 2024, the £1,000 trading allowance, when a tax return is needed and the VAT threshold.
Personal-items vs trading scenarios
| Situation | Tax treatment | Reporting |
|---|---|---|
| Selling old personal clothes / household items occasionally | Generally not taxable - HMRC says you are unlikely to pay tax selling personal items from your home | No tax return just because a platform reports you. Platform reporting is not a tax trigger |
| Reselling thrift / charity shop finds for profit | Likely trading income - buying goods to sell at a profit | Tax return needed if gross trading income is more than £1,000 |
| Making + selling crafts / handmade goods | Likely trading income - making goods to sell at a profit | Tax return needed if gross trading income is more than £1,000 |
| Reselling new stock bought at retail (drop-shipping, branded resale) | Trading income | Tax return + records of stock, sales and expenses |
| High-volume Vinted seller (clearing an old wardrobe over time) | Depends on the badges of trade (BIM20205), not on volume alone | Genuine personal-item disposals are not trading; buying to resell is |
Related guides
- UK Going Self-Employed Checklist 2026/27 - setup if becoming a serious trader.
- UK Side Hustle £3,000 Threshold 2026/27 - the proposed threshold change.
- UK Content Creator Tax 2026/27 - parallel creator income.
- UK MTD ITSA 2026/27 - quarterly reporting for qualifying income above the threshold.
Frequently asked questions
Am I taxed for selling on Vinted / Etsy?
Depends on what you're selling. Selling personal items you no longer want (old clothes, books, household items): HMRC says you are unlikely to pay tax if you sell personal items from your home, like the contents of a loft or garage. Trading (buying goods to resell, making goods to sell at a profit): HMRC says you are likely to be trading and will pay tax on your profits. Whether an activity is trading is judged on the badges of trade (HMRC manual BIM20205). Threshold: you must send a tax return if you were self-employed and earned more than £1,000 before expenses; up to £1,000 of gross trading income is covered by the trading allowance.
What's the Digital Platform Reporting requirement?
From 1 January 2024 digital platform operators collect seller details and report sellers and their income to HMRC each year, by the following 31 January (2024 data by 31 January 2025). A seller of goods is not reported if they make fewer than 30 sales in a calendar year and receive less than 2,000 euros (about £1,700) for them; sellers of services or property rentals have no such exception. Individual sellers are asked for their full name, address, date of birth and tax identification number (the National Insurance number for UK residents). Platforms must give you a copy of what they report. HMRC is clear that being reported does not automatically mean you owe tax.
Is there a £3,000 Self Assessment threshold for side income?
Not in 2026/27. The rule on GOV.UK is that a sole trader must send a tax return if they earned more than £1,000 before taking off expenses. Proposals to raise the registration threshold have been discussed, but nothing changing it is in force, so plan on the £1,000 rule for 2026/27.
How do I use the £1,000 Trading Allowance?
Section 783A ITTOIA 2005. Gross trading income up to £1,000 per tax year is tax-free. If you earn more you choose one of two methods: (a) deduct the £1,000 allowance instead of your actual expenses, which suits sellers whose costs are below £1,000; or (b) deduct actual business expenses instead. You cannot do both. Example: £1,500 of sales of goods that cost £800 to source - the allowance leaves £500 taxable, actual expenses leave £700, so the allowance wins.
When does it become VAT-registrable?
You must register for VAT if your taxable turnover for the last 12 months goes over £90,000, or you expect it to go over £90,000 in the next 30 days alone (GOV.UK, when to register). Once registered you charge VAT on sales and can reclaim VAT on business purchases, and VAT returns are filed through Making Tax Digital software. You can register voluntarily below the threshold.
What expenses can I deduct?
If you are not using the £1,000 trading allowance, you deduct expenses incurred wholly and exclusively for the trade (section 34 ITTOIA 2005). Typical for an online seller: (a) cost of the goods sold (craft materials, purchase cost of resold items), (b) platform listing, transaction and promotion fees, (c) postage, (d) packaging, (e) a proportion of home running costs or the simplified flat rate, (f) equipment such as a camera or postal scales, (g) software, (h) business mileage, (i) bank charges on a business account. Keep records for at least 5 years after the 31 January submission deadline of the tax year (GOV.UK).
How do I track inventory?
Resellers and makers need, for each item: date acquired, cost, description, date sold, sale price and profit. A spreadsheet works; platform dashboards can export sales data; accounting software can track stock too. For the tax figure, cost of goods sold = opening stock + purchases in the year - closing stock.
What if I have a day job + this is a side hustle?
Trading profit is added to your employment income and taxed at your marginal rate - the Personal Allowance and bands are shared across both. Class 4 National Insurance is due on profits above £12,570 at 6%, and 2% above £50,270. PAYE carries on as normal and the tax return adds the trading profit. Making Tax Digital for Income Tax applies from 6 April 2026 to sole traders and landlords whose qualifying income (gross self-employment plus property income) was over £50,000, falling in later years. Check your employment contract for any restriction on outside work.