Martin Lewis explains new HMRC rule for people making money on eBay or Etsy
Martin Lewis has shared advice for Brits who are making money by selling on sites like eBay, Vinted or Airbnb.
The MoneySavingExpert.com (MSE) website founder shared a message on his X/Twitter account last night. From January 1, websites and apps which allow their users to earn money through selling or renting have to inform HMRC of the earnings their users make.
The new rules for these companies help HMRC track who is liable to pay tax on their earnings. Under current rules, you can make £1,000 a year alongside your day-to-day job without having to pay tax on it. If you make more then you have to register as self-employed and pay tax on the earnings. However, many Brits were confused about the new rules for these companies believing that HMRC would be taxing the earnings on all money made through using these platforms.
On Wednesday evening, Martin Lewis took to social media to clear up the confusion, explain what has changed, and how it will affect users of these platforms. Alongside his post, he shared an article on the MSE website.
Martin posted: "Sell on eBay, Etsy or Vinted or rent your home on Airbnb? Firms will now report some earnings to HMRC, so check if yours will be and if you need to pay tax. Many people asking questions, almost all of which are answered in the article itself. I'm afraid I can't do individual answers, please click the link and read the article my team and I have worked hard on :)."
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The article - which was written by a member of the MSE team - said: "If you sell goods online on sites such as eBay, Etsy or Vinted, rent out your home on Airbnb, or earn extra income from providing services via platforms including Deliveroo or Uber, then these firms will soon start passing on information about you to HMRC."
The article highlighted that due to this new rule, it was "vital" to check and see if you need to pay tax or declare income through self-assessment. The sites will only pass your information to HMRC automatically if you are selling 30 items or more a year and you have total earnings equivalent to around £1,700 (€2,000). It noted that you do have to declare earnings over £1,000 a year for tax purposes.
The new rules cover any "app, website or other type of software that connects sellers to the consumers of their goods and services". This means a wide range of popular sites and apps fall under the new rules. This includes eBay, Depop, Vinted, AirBnb, Devlieroo, Etsy etc. The article also clarified that the new measures do not apply to cashback sites, such as Quidco and TopCashback, as cashback is not taxable.
The MSE website states: "If the total amount you earn via a platform in a tax year is ABOVE £1,000, you LIKELY need to tell HMRC and MAY have to pay tax on this" If you are not sure if you should be paying tax or not, then you can look at HMRC's online guide which explains when you should declare your income.
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