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For many of us, selling second-hand ‘treasures’ on eBay is a side gig to our full-time employment. For others, it is your main source of income. The idea of ‘eBay tax’ isn’t necessarily one of our considerations before we list our clothes, bric-a-brac, furniture, antiques or anything else that we might be selling. But your eBay profits are not always totally free.
Ok, eBay tax isn’t a thing in the eyes of HMRC. But the tax implications of selling on eBay are very much real. The more you sell on eBay, the more it will appear to HMRC that you are doing so to make a profit. And if profits are the goal, this needs to be declared.
Profits are more clear cut when you either make or buy goods specifically to sell on eBay, but you should be mindful of your liability even if you’re selling second-hand tat.
The big question is, once declared, what are the taxes for eBay sellers?
Book a 1-1, 30 minute tax advice consultation with an accredited accountant to get a better grip on what tax you’re liable for when selling on eBay. Easy,100% online, and for a one-off, low fee.
The tax that you owe on eBay profits depends on how much profit you make. If you make up to £1,000 a year from your eBay sales – assuming that they don’t account for your full-time income – this is tax-free with the Trading Allowance.
The Trading Allowance enables you to earn up to £1,000 tax-free self-employment income. It’s not the same as the personal allowance which is the tax-free portion of your full-time earnings.
Even if you don’t earn more than £1,000 a year from your eBay sales, it might be worthwhile completing a Self Assessment just so that you’ve declared all of your earnings to HMRC. Take a look at the reasons that you might have to fill out a personal tax return here.
If you’re selling second-hand personal items of significant worth on eBay, you should be aware of your liability to pay CGT. Any personal possessions that you sell (with the exception of your car – check HMRC for more details on this process) that are worth more than £6,000, you’ll need to pay Capital Gains Tax.
The good news is that if you do sell something worth more than £6,000 such as jewellery or a painting, you only pay CGT on the profit i.e. anything over £6,000.
Here are the rates of capital gains tax that you pay. Be aware that the £6,000 threshold is specifically for personal possessions.
Capital gains tax rates in the 2025/26 tax year. It’s paid on profits over the £3,000 CGT allowance 👇
| Type of asset | Basic rate | Higher rate |
| Shares | 10% | 20% |
| Residential property | 18% | 24% |
| Bitcoin/cryptocurrency | 10% | 20% |
| Other | 10% | 20% |
As an eBay seller, there are a few things you can expense as part of your business operations. For example, you can include your eBay selling fees as a business expense in your Self Assessment tax return.
Other things you can also consider expensing include PayPal fees, postage fees, courier costs, and packing supplies like parcel tape and boxes.
The important factor here is whether or not HMRC considers you to be ‘trading’. If you sell low-value items very occasionally, you’ll be ok not to declare your earnings. But as you start to approach the £1,000 tax-free threshold, you should consider filling out a Self Assessment to pay your taxes.
Why?
Your transactions are online which means that they are completely trackable. And HMRC can access your selling records from eBay. So if you do go over £1,000, you’re legally required to declare them!
VAT stands for Value Added Tax (VAT) and is a tax added on most goods and services in the UK.
The value added tax (VAT) rates in the 2025/26 tax year 👇
| Tax rate | What the rate applies to | |
| Standard rate | 20% | Most goods and services |
| Reduced rate | 5% | Goods and services like children’s car seats and home energy |
| Zero rate | 0% | Goods and services like most food, books and children’s clothes |
*Businesses earning more than £90,000 in a tax year must register for VAT. See here for more
If you’re not earning more than the VAT threshold, you won’t need to register for it unless you want to claim back VAT you’ve paid on purchases (for example, VAT on the laptop you use for work).
Fun fact: In America, instead of VAT, consumers pay something called a sales tax. The actual amount you’re taxed varies depending on what state you’re in.
Get ahead of the tax game, stress-free. Whether you need advice or your tax return sorted and filed, we’ll do it all so you don’t have to.
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