There is a lot of misinformation about the changes re tax in regards to eBay, Airbnb, Vinted etc that came into force on 1st January. That includes the below Tweet, with 16,000 likes and 1.6 million views. I have no qualms in criticising the government’s tax policy or HMRC (see some of my previous posts) but in this case it is unwarranted.

All that has changed is that some sites will be sharing information with HMRC to identify those who have been ‘trading’/renting on these sites and not declaring it for tax purposes. There have been no changes at all to the underlying tax laws.

If you sell your unwanted goods you will not be taxed on them. HMRC will only tax those who are ‘trading’, i.e on a commercial basis with a view to profits. For example, if you have a garage sale to sell your old clothes, you’re not taxed on the proceeds. If you set up a second hand clothing shop which buys and sells clothes you are taxed on the profits, as you are ‘trading’. There can be some grey areas; whether or not you are actually ‘trading’ comes down to the application of rules (largely) brought in 70 years ago called the Badges of Trade.

Note that even if you are ‘trading’ you can gross up to £1000 per tax year without notifying HMRC. In addition, £1000 of property income can also be received each year without notifying HMRC.