eBay Tax In 2025: How Much Can You Earn Online Before Paying Tax?

Whether a side hustle or clearing out some storage space, more and more people are selling personal items on eBay, Vinted, Etsy, and other online platforms. However, the “eBay tax” (tax on these kinds of sales) is high on HMRC’s agenda, and you might lose out on some of the cash you make if you aren’t aware of the rules.

In this article, we’ll answer popular questions about selling items on eBay and other third-party platforms, so you don’t get caught out. From when to tell HMRC about your sales to how much you might owe, and whether or not eBay will report you to the authorities, we’ll give you everything you need to know to feel comfortable selling online.

Do I have to pay tax on selling second-hand items?

First of all, you probably won’t have to pay tax if you’re casually selling a few bits and bobs on eBay.

This could be an old phone or tablet, clothes, or furniture, and the general rule is that if you’re not making enough money to live on or a regular profit, you probably won’t be on HMRC’s radar for eBay tax.

So, if you’re having a clear-out or getting rid of old items, you’re more than likely in the clear and have nothing to worry about. However, there is a limit to the amount you can earn.

When do you need to pay tax on eBay sales?

The £1,000 Trading Allowance specifies that anyone can earn up to £1,000 a tax year without having to pay National Insurance or Income Tax to HMRC.

However, some of you will make over a grand after a big clear-out, even though you don’t have a business and have no intention of making one from your eBay activity. This makes things a bit unclear, but if you make just over £1,000 a year and are clearly not making a business selling items online, HMRC probably won’t come knocking.

With that being said, it’s better to be cautious if you’re likely to earn over the threshold, especially if it’s a regular thing. If this sounds like you, consider registering with HMRC or getting in touch with an accounting professional to clear things up for you.

Can you avoid eBay tax in 2025?

If you’re selling personal items on eBay and make under £1,000 per year, you don’t have to pay any tax on those earnings.

This isn’t tax avoidance, but the rules of the game.

As with any income, however, it’s important to stay within your legal allowances without deliberately underreporting your income.

If you’re buying items in bulk and reselling them for profit, for example, you will be classed as a trader by HMRC and need to declare your earnings. If you’re investigated and found to be hiding these kinds of activities, you could be fined.

Will eBay report me to HMRC?

Yep, as of January 2025, eBay reports individuals to HMRC under new data-sharing rules.

These rules state that information is shared with HMRC when sellers make a certain number of transactions per year. The move is part of an international agreement stemming from the DAC7 regulation, which was introduced by the EU and adopted in the UK.

This is one of many ways HMRC is trying to tackle tax avoidance in the UK, with “nudge letters” being distributed to encourage individuals to check whether they should declare their online income. While these letters aren’t accusations, they are clear signals of intent from HMRC that basically say: “We’re watching you.”

It’s important to note here that tax rules aren’t changing, however, tax authorities are simply clamping down on tax avoidance, which is becoming widespread on eBay and similar platforms.

How to stay compliant and tax-efficient

Staying compliant and tax-efficient as an eBay seller is pretty simple. You don’t need to do anything if your sales are under the Trade Allowances threshold of £1,000 a year.

Making a regular profit with online sales exceeding £1,000 a year? Register for Self Assessment and declare your income with HMRC. Doing so means keeping records of expenses, which can include things like eBay fees, postage costs, packaging expenses, and even how much internet you use.

Do I have to pay sales tax on eBay?

This is a pretty common question but one that doesn’t apply to the UK because, unlike the US, sales tax doesn’t exist in our economy.

However, you will have to pay Income Tax and possibly VAT. The latter applies if your turnover is above the VAT threshold of £90,000 in a rolling twelve-month period. The latter applies if your turnover is above the VAT threshold of £90,000 in a rolling twelve month period.

When to Seek Professional Tax Advice

Professional tax advice helps you stay on top of your responsibilities and the right side of HMRC. If you’re a trader making regular profits from eBay, you should speak to accounting professionals who can help you riddle out the complexities of UK tax and your eBay activity.

You should also consider professional tax advice if you’ve received a “nudge letter” from HMRC or if you’re unsure about the taxation requirements like expenses, declaring your income, or declaring VAT.

Conclusion

People generally think tax is more complicated than it is, but it doesn’t have to be stressful. The right advice can ensure you stay compliant and stress-free when selling items online.

The golden rule in this scenario is that if you’re a casual seller on eBay offloading items sporadically with no intentions of starting a business, you’re unlikely to owe any tax. On the flipside, if you’re making a profit and earning anything over the £1,000 Trader Allowance Threshold, stay organised and register with HMRC.