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Do I pay tax on online earnings?
Here's who needs to report income from Airbnb, eBay, Vinted and more
27 January 2025
Recent media reports have led many to think that by flogging old, unwanted stuff on eBay and Vinted, you'll now need to pay tax on it. You won't. But if you're trading and making money, whether from selling goods, creating content, providing a service and more, you probably will. This guide helps you work out if you need to declare your income.
This is the first incarnation of this guide – please feed back if it's helpful or if anything's missing. While every effort's been made to ensure accuracy, it doesn't constitute tax advice tailored to your circumstances. Thanks to Meredith McCammond from the Low Incomes Tax Reform Group (LITRG) and HMRC for their help.
Why you need to check the rules
As of January 2024, so-called "digital platforms" – such as Airbnb, eBay, Etsy, Deliveroo, Uber and Vinted – now have to collect extra information about sellers, including how many sales they've made and how much income they've generated.
Online platforms must start sharing this information with HMRC by 31 January 2025. This first lot of data-sharing covers part of the 2023/24 tax year, so it's worth checking whether you might owe any tax for this period.
Your information WON’T be shared with HMRC if you made fewer than 30 sales and you earned less than €2,000 (about £1,700) from them during the 2024 calendar year – but you may still need to report these earnings yourself, as we'll come onto.
Note this ISN'T a new tax – the new rules simply give HMRC more visibility over your income from online platforms. The reporting rules have changed, but the tax rules haven't.
Activities that didn't require you to pay tax before, such as selling old baby clothes, won't result in a tax bill now – we explain this in more detail below.
Watch Martin's video briefing on the new rules for digital platforms
In the video below, MoneySavingExpert.com founder Martin Lewis explains HMRC's reporting rules, including who's affected and what you need to do.
Embedded YouTube Video
This video is from ITV's The Martin Lewis Money Show Live, which was broadcast on 9 January 2024.
Understand the trading allowance
It's important to get to grips with this first, as it'll come up throughout the rest of this guide.
The trading allowance is a tax exemption that means you can make up to £1,000 working for yourself each tax year without having to declare these earnings to HMRC. Working for yourself includes:
- Self-employment – for example, as a sole trader, freelancer or independent contractor;
- Casual work – for example, tutoring, pet sitting, gardening;
- 'Side hustles' – including online content creation; and
- Selling goods online with the intention of making a profit – in other words, buying or making items specifically to sell them on (NOT just having a clear out).
If you do any of these activities – or a combination of them – and you make more than £1,000 in total during the tax year, you'll need to file a self-assessment tax return (even if you made less than £1,000 from each one separately). When filing, you can either use the trading allowance to reduce your income by £1,000, or claim your actual business expenses – whichever benefits you more.
Note: What counts is your total income before taking off any platform fees – NOT what you end up with in your bank account. So double check, especially if you're close to the limit.
Can everyone use the trading allowance?
No – you can't use the allowance if any of your trading income during the tax year came from what HMRC calls "connected parties". This includes:
- A company you own or control (or that someone connected to you owns or controls);
- A partnership you're in (or someone connected to you is in); or
- Your employer, if you're contractually employed (or the employer of your spouse or civil partner if they're contractually employed).
For example, if you're a full-time employee but make and sell art in your spare time, and your employer buys one of your artworks for the office, you wouldn't be able to use the trading allowance – you'd have to declare your income to HMRC.
Does renting out property count?
The trading allowance DOESN'T cover rental income. You can make up to £7,500 a year tax-free renting out a room or £1,000 a year tax-free renting out a whole property – see how these schemes work below.
If you've large expenses or you're making a loss, it's likely best not to use this allowance
In some cases, you could be better off not using the trading allowance:
- If your expenses are more than £1,000. You can claim tax relief either by using your trading allowance OR by deducting your expenses (the costs you paid to sell the items or provide the service). So if your expenses are more than £1,000, it's probably worth deducting these instead of using your trading allowance.
- If you made a loss, meaning that you paid out more in expenses than you made back. Instead, you should submit a self-assessment tax return and claim tax relief for the loss, as this'll be worth more.
For more guidance on whether you should use your trading allowance, see the LITRG's website or seek further guidance.
How the tax rules apply if you're selling, renting out a room or providing a service
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Selling goods
Platforms covered: eBay, Etsy, Facebook Marketplace, Gumtree, Vinted and others.
When it comes to selling things, what matters is whether you acted with the intention of making a profit. This intention is the main factor in determining whether you're considered to be running a business ('trading') – and therefore whether you have to declare your extra income.
So really it comes down to what you sold and why:
- If you made or bought items specifically to sell them on, this would likely be considered trading. If selling the goods has taken you over your £1,000 trading allowance for the tax year, you'll need to tell HMRC by filing a self-assessment tax return.
- If you only sold unwanted items you already owned, it's usually not trading. In almost all cases, if you just flogged stuff you already had lying around, you don't need to tell HMRC or pay any tax on this.
The one exception is if you sold a single item for £6,000 or more. Depending on what it was, you may need to tell HMRC and pay Capital Gains Tax (CGT). This may apply if you sold something that increased in value since you got it, such as jewellery, antiques and paintings.
You can check whether you need to tell HMRC about the sale using its online tool. For more detailed info about CGT, see the LITRG's guide.
Example of the rules in practice
![Untitled design - 1]( "Untitled design - 1")
Susie is employed full-time as an HR assistant. Between 6 April 2023 and 5 April 2024, she started a podcast about office life in her spare time, earning £800 in sponsorship cash.
During the same period, she cleared out her wardrobe and sold some old clothes she no longer wears, earning £300. But Susie didn't buy the clothes with the intention of selling them on, so that £300 doesn't count towards her trading allowance.
This means Susie only made a total of £800 working for herself this tax year. As this is covered by her trading allowance, she doesn't need to file a self-assessment tax return.
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Renting out property
Platforms covered: Airbnb, Gumtree, SpareRoom, Vrbo and others.
Here, the rules depend on what exactly you're renting out:
- A room in your main home (in other words, having a lodger): Under the 'Rent a Room' scheme, you can make up to £7,500 within a tax year from renting out a room or rooms in your home without having to declare your earnings to HMRC. The room(s) must be furnished and must be in your main home – in other words, the place you live most of the time, not a holiday home or second home.
- Your whole home or a different property: Rent a Room doesn't apply – but you can use a different tax break called the 'property allowance'. This lets you earn up to £1,000 from land or property you own without having to declare it.
While you don't need to declare earnings within these thresholds, you do need to tell HMRC about any rental income that exceeds these limits by filing a self-assessment tax return.
Note: Both Rent a Room and the property allowance can be used alongside your trading allowance for non-property income. This means that you can earn, for example, £5,000 from a lodger and £800 as a freelancer without having to declare this.
Quick questions
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Providing services
Platforms covered: Deliveroo, Just Eat, Taskrabbit, Uber and others.
This one's simple: if providing the service has taken you over your £1,000 trading allowance for the tax year, you'll need to tell HMRC by filing a self-assessment tax return.Example of the rules in practice
![Untitled design - 1]( "Untitled design - 1")
Michael is retired. To make some extra cash, he put in some shifts as a food delivery driver between 6 April 2023 and 5 April 2024, earning £800. During this time he also started making birthday cards and selling them online for a profit. He sold 200 cards for £2 each, meaning he was paid £400.
Before deducting expenses, Michael made £1,200 working for himself within this tax year, exceeding his trading allowance by £200. As a result, he needs to file a self-assessment tax return. He can then either claim the £1,000 trading allowance as a deduction or deduct his expenses (but not both).
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Creating online content
Platforms covered: Instagram, Patreon, podcast apps, TikTok, Twitch, Youtube and others.
If you earned money from ad revenue, sponsorships, subscriptions, tips or donations, and this takes you over your £1,000 trading allowance for the tax year, you'll need to tell HMRC.
Note that it's not just cash that counts – you may also have to declare any gifts you get (from brands or PR agencies, say), if you got these in exchange for promoting them. For further info, see the LITRG's website.
How to declare your earnings
If you've exceeded any of your allowances for the tax year, you'll need to tell HMRC by filing a self-assessment tax return – even if you think you have no tax to pay.
If you're new to this, the first step is to register with HMRC. You should then get a Unique Taxpayer Reference (UTR) by post (normally within a couple of weeks) – though you may be able to see your UTR sooner on the HMRC app or through your online HMRC account.
Then, you can either submit your tax return online or request a form and send it by post. While you're filling out your tax return, you'll be able to claim your trading allowance, property allowance or the Rent a Room relief.
If it's your first time filing online but you already have a reference number – for example, because you've previously filed a paper return – you should be able to skip this step and just register for the online service.
For the 2023/24 tax year (6 April 2023 to 5 April 2024), paper tax returns issued in April 2024 had to be submitted by 31 October 2024, but if you're filing online, you've got until 31 January 2025.
Where to get additional support
If you're still unsure about what to do next, or you need more support, here's where you can go for free help (we've listed the options in order based on their specialisms):
If you're still unsure about whether you need to file for self-assessment or you've got another tax query, you can contact HMRC.
Its phone helplines can be very busy, so it's worth trying its online services first:
- Use the online tool on Gov.uk to check if you need to tell HMRC about income from online platforms;
- Ask HMRC's digital assistant and webchat for answers.
If you can't find what you need online, here's how to get in touch:
- Phone: 0300 200 3310
- Opening times: Monday to Friday, 8am to 6pm
- Post: You can find the address on Gov.uk.
TaxAid is a charity that offers free, independent advice for those on low incomes. It asks that you take your query to HMRC in the first instance though.
- Phone: 0345 120 3779
- Opening times: Monday to Friday, 9am to 5pm
- Contact form: See the TaxAid website.
Tax Help for Older People is a sister charity of TaxAid which provides support to people over 60 with an income of less than £20,000 a year.
- Phone: 01308 488 066
- Opening times: Monday to Friday, 9am to 5pm
- Contact form: See the Tax Help for Older People website.
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