Do you sell your knitting or crafts on a marketplace such as Etsy or Ebay? Perhaps you make extra income by selling your unwanted clothes or hand made goods on Vinted?

If you do and live in the UK, you need to be aware of radical new tax law changes which came into force on 1 January 2024.

Please read on to find out more information about how new UK tax laws in 2024 could affect anyone who makes extra income by selling on an online platform.

Who is impacted by the new tax law regarding sale of goods on marketplace websites?

Thousands of UK citizens make extra cash each month by selling their unwanted, hand made or vintage items on online marketplaces such as Etsy, Vinted and Ebay.

Such activity has in the past gone largely unchecked and the sale of second hand clothes and unwanted goods hasn’t always been seen as business activity.

From January 2024, this has completely changed.

Marketplaces such as Vinted and EBay have been ordered by by HMRC to collect and report information about online sellers, and anyone making over one thousand pounds per year in this way will have to register for self assessment and pay tax.

The government has invested millions into this initiative and a team dedicated to conquering what will now be seen as tax evasion has been set up.

While a thousand pounds seems to be a lot of money, it can soon add up, and those who sell on websites such as Vinted, Etsy and Ebay need to ensure that they follow the new UK tax rules to avoid punitive action being taken against them.

It is worth noting that these tax changes will also apply to people who earn extra cash via Uber, Deliveroo and other ‘gig’ type agencies. Many are calling the new reporting rules ‘side hustle tax’.

If you already declare your extra income from your knitting, crafts, second hand clothes etc none of the new tax changes will affect you. You also need to be making over a thousand pounds before registering your extra income.

The changes are to target the people who use the likes of Vinted, Etsy and Uber as a job but under declare or don’t think they have to pay tax on the sale of items such as second hand clothes.

As far as we are aware, it is people who have more than 30 transactions per year and/or make over a thousand pounds. So for you regular hand made knitting, crafts or knitting or crochet pattern sellers out there, if you are reported by the likes of Etsy and Ebay and don’t register for self assessment, you could potentially end up in trouble.

For more information about the new 2024 UK extra income tax change, this article is worth a read.

To find out whether or not you need to register for tax self assessment, click here for the GOV UK website information.

If you do need to register for tax self assessment, you can do so online or by calling the self-assessment helpline on 0300 200 3310. You will need to register by October 5, 2024, for the 2023/24 tax year.

Disclaimer – This article does not constitute tax advice and may contain errors or inaccuracies. Please contact HMRC for any questions regarding whether or not you need to register for self assessment for tax payment purposes.