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If you’re a fan of the online second-hand selling platform, then this question has probably been on your mind this past week 🧐
To answer it – yes, they do now!
But, it’s not quite as scary as it sounds. So, let’s chat 👇
It should come as no surprise when we tell you that HMRC aren’t interested in browsing through second-hand Levi’s jeans. No, the only thing they’ll be browsing are your sales! 🛍️
Why, now, you ask? Well, to crack down on tax evaders! 🚨 So, yes, you do have to declare your Vinted earnings. But, it’s not as bad as it sounds – for regular folk, at least!
When you earn any “extra” income (like selling items through online platforms such as Vinted) you may have to declare and pay tax.
But, this isn’t always the case. So, sustainable Sallys, fear not! 😅
Now, this is the important bit if you want to avoid a fine from HMRC!
You have to declare and pay tax on profits higher than £1,000. Perhaps, if you have some very high-end items, this doesn’t sound like a lot.
But, thy key word here, which we can’t stress enough, is profits! ✨
You’re only liable to pay tax on your profits. Not income, not sales, not transactions. Just the good old’ profits.
It is confusing though, so let’s explain.
You’ll only make a profit, if you sell your items for more than you originally bought them.
Does that make sense? Maybe not? No worries, we’ve got an example to help you out!
Let’s say you bought a pair of Nike airforces for £60 back in the day ( if you were lucky – inflation 😢).
Anyway, now you’ve got your use out of them and you’ve moved onto bigger and better things (cough cough New Balances). So, you sell them for £20 on Vinted.
The thing is, you won’t be making any profit. You’re actually making a £40 loss. We know, you don’t care, you just wanted some extra cash. And luckily, HMRC won’t care either, as they are only interested in those that are profiting 🤔
However, HMRC do care about resellers who aren’t declaring their large profits 😠
– those for whom selling is their main source of income, and they’re buying things (likely wholesale) specifically to sell.
But, as always, there’s more to it than that. So let’s talk figures.
The trading allowance is a £1,000 tax-free amount. You can reduce your tax liability by claiming this allowance against any self-employed profits, including Vinted sales 😉
So, if you earn under £1,000 in Vinted profits, you won’t need to declare it to HMRC!
When you earn more than £1,000, you can claim the trading allowance on your tax return.
This means you only pay tax on your profits that exceed this tax-free amount.
To figure out how much you may owe, check out our calculator for second-hand sellers below.
Real talk – not a lot. In tax terms, the rules around declaring your profits haven’t changed for sellers.
Anyone earning £1,000 or more profit in a tax year has always been supposed to declare it and pay any tax due to HMRC – oops 🫠
The change? Digital platforms, that’s not just Vinted – (Depop, Ebay, etc.) now have to collect information on their sellers and automatically share it with HMRC.
The key word here being automatically. Before, HMRC would only have accessed this information if requested. In other words, if they thought you were evading tax 🕵️
You’ve come to the right place to ask this question! It’s our speciality, after all 💪
You’ll need to complete and file something called a Self Assessment to declare and pay tax on your Vinted profits.
If this is new to you, it can all be rather confusing! 🤯 So, let’s break it down.
If you’ve made over £1,000 in Vinted profits, and haven’t filed a tax return before you’ll need to register for Self Assessment:
In about 10 days, your UTR number should come through the letterbox 📮
Be sure to keep this safe otherwise it will be a pain when it’s time to file your tax return!
There are a few deadlines you should be aware of including:
If you think you may owe HMRC for your second-hand sales in the 2022/23 tax year (6th April 2022 → 5th April 2023), then file soon as the deadline is January 31st 2024!
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