14th October 2026
Selling unwanted clothes, furniture or other belongings through online platforms has become part of everyday life. But with platforms now sharing certain seller information with HMRC, there is still some confusion about when selling online could result in a tax liability.
The important point is that there is no new tax on selling online. Whether tax is due depends on what you are selling, why you are selling it and whether your activity amounts to trading.
If you are simply clearing out your wardrobe or garage and selling personal possessions you no longer want, you are unlikely to be trading and, in most cases, will not have Income Tax to pay on those sales.
However, the position can be different if you regularly buy items specifically to resell at a profit, or make products with the intention of selling them.
For example, buying clothes from charity shops to resell online for more than you paid for them is very different from selling clothes you originally bought for your own use. HMRC considers the nature and intention of the activity when determining whether someone is trading.
Individuals can generally receive up to £1,000 of gross trading income in a tax year under the trading allowance. Gross income means the total received before expenses are deducted, rather than the profit you make.
If your total gross trading income exceeds £1,000, you may need to tell HMRC and register for Self Assessment. The allowance applies across relevant trading activities, so it is important to consider other trading or side-hustle income too, rather than looking at each platform separately.
Since January 2024, digital platforms have had additional responsibilities to collect information about sellers and, in certain circumstances, report it to HMRC.
For sellers of goods, your details generally do not need to be reported if you make fewer than 30 sales and receive less than €2,000 (around £1,700) during the calendar year.
However, these reporting thresholds should not be confused with the £1,000 trading allowance. A platform reporting your information to HMRC does not automatically mean that you owe tax.
The information gives HMRC greater visibility of income generated through digital platforms and can help it identify where taxable income may not have been declared.
If your online selling has developed into a more regular activity, keeping accurate records is important. This could include details of your sales, the original cost of items purchased for resale and other relevant business expenses.
Good records will make it much easier to establish your income and calculate any taxable profit if you do need to complete a tax return.
There isn’t a single rule that determines whether selling online amounts to trading, and individual circumstances can differ.
If you regularly sell goods online, buy or make items specifically to sell for a profit, or are unsure whether you need to declare your income, it is worth getting advice rather than assuming that no tax is due.
If you have questions about income from online selling or your wider tax position, please get in touch with the Thompson Jenner team.
