What are the tax rules for selling goods online?
From 2024, digital platforms must report your
information to HMRC if sales exceed 2,000 Euros (Approximately £1,700) or 30 or more instances of sales of goods in a calendar year. Casual sellers are exempt, but regular traders must
register for Self-Assessment.
Effective 1 January 2024, new rules require digital platform operators in the UK to collect and verify information about sellers on their platforms. The first reports due under these new rules must be submitted by
31 January 2025. HMRC has released a press release to clarify that the tax rules for sellers on digital platforms have not changed despite rumours.
When are these rules coming into effect?
These new rules mean that if you are using online platforms to sell goods or services, any pertinent information collected about you between 1 January 2024 to 31 December 2024 will be reported to
HMRC by 31 January 2025. The online sellers must give you a copy of the reported information. This can help if you must make tax returns.
You may need to register for self-assessment and pay tax if you:
- buy goods for resale or make goods to sell them for a profit.
- offer a service through a digital platform – such as being a delivery driver or letting out a holiday home through a website.
- AND generate a total income from trading or providing services online of more than £1,000 before deducting expenses in any tax year.
Taxable Income or gains
A platform reporting your transactions to HMRC does not automatically mean any sales will be taxable. This is because to be subject to taxation on any gain/profit you will need to either be:
If the items being sold are personal items from your home these are unlikely to be taxable. The intention is to ensure those who purchase items with a view to making a profit (ie a trade) or those on which they expect to make a return on a longer term investment (ie a capital gain) pay tax on this trade/gain.
Stay Compliant with New Tax Rules for Online Sales
If you are selling goods online, the latest tax regulations could affect your business. Our experienced tax team is here to help you navigate these changes, ensuring compliance while optimising your tax position.
Contact us today for tailored support.