HMRC warns Vinted sellers over new ‘30 item rule’ coming in weeks – check now or risk £100 fine
HMRC has issued a warning to Vinted sellers over a new “30-item rule” which is set to come into force in a matter of weeks.
Those who make money selling items online may need to report their earnings to HMRC if they make a profit.
Online platforms such as Vinted and eBay will begin sharing their sales data with HMRC from January 2025. Previously the taxman had to request it.
However, HMRC is now reminding Vinted and other second-hand market sellers that the rules only apply if you sell 30 or more items or earned roughly £1,700 in 2024.
That means that if you only occasionally sell items on Vinted – or looking to flog some extra items before Christmas – these rules do not apply to you.
Angela MacDonald, HMRC’s second permanent secretary and deputy chief executive officer, said: “The new reporting requirements for digital platforms came into effect at the start of 2024.
“It is not a new tax and whether people are selling personal items on eBay, renting homes out on Airbnb or delivering takeaways through Just Eat – no tax rules have changed.”
The sharing of sales data also does not automatically mean you need to complete a tax return.
However, those who may need to register for Self Assessment and pay tax, include those who:
- Buy goods for resale or make goods with the intention of selling them for a profit
- Offer a service through a digital platform – such as being a delivery driver or letting out a holiday home through a website
- And generate a total income from trading or providing services online of more than £1,000 before deducting expenses in any tax year
Vinted previously said it would message sellers to let them know if they need to file an HMRC seller form.
It is also worth bearing in mind that the HMRC seller form doesn’t necessarily mean that you owe tax.
The taxman will use it to verify against its own records to make sure sellers and renters are correctly reporting their income on their tax returns.
The deadline to submit the return for the 2023/24 tax year – and pay any tax you owe – is January 31, 2025 online.
But there was an earlier deadline of October 31 this year if you file via post.
It is worth bearing in mind that HMRC will fine you £100 for failing to file your return by the deadline.
Then, a £10 daily fine applies every day you don’t submit your tax return.
When do I need to file a tax return?
Self Assessment is a system HMRC uses to collect income tax.
When does the tax year start and end?
Tax years run differently to the standard January to December year
Instead, it runs mid-year from April to April.
Many other countries around the world have tax years that run with the calendar year.
In Ireland, the US, France and Germany for example, it starts on January 1 and ends on December 31.
But in the UK for historical reasons, our tax year starts and finishes mid-way through.
The 2023-2024 tax year starts on April 6, 2023, and ends on April 5, 2024.
The 2024-2025 tax year runs from April 6, 2024, to April 5, 2025.
Tax is usually deducted automatically from wages, pensions and savings, but people and businesses with other incomes must report it in a tax return.
It is not just online sellers who are required to fill out a tex return.
The rule applies to the following:
- Your income from self-employment was more than £1,000
- Earned more than £2,500 from renting out property
- You or your partner received high-income child benefits and either of you had an annual income of more than £60,000
- Received more than £2,500 in other untaxed income, for example from tips or commission
- Are limited company directors
- Are shareholders
- Are employees claiming expenses over £2,500
- Have an annual income over £100,000
Some Vinted users will have to submit a Self Assessment tax return if they earn over £1,000 in profit.
The process is separate from the HMRC reporting requirement, and Vinted users are responsible for handling this themselves.
If you are confused about whether or not you need to file a Self Assessment tax return you can use an online tool on GOV.UK.
The tool lets you submit information about your earnings and then will tell if you need to file one or not.
You can register online via the GOV.UK website.
To register online you must log on to your business tax account on the HMRC website and select ‘Add a tax to your account to get online access to a tax, duty or scheme’.
If you do not already have sign in details, you’ll be able to create them when you sign in for the first time.
If you do not want to register online you must send a form to the following address: Self Assessment, HM Revenue and Customs,
BX9 1AN, United Kingdom.
After you submit your form you will then get a unique taxpayer reference code (UTR) and activation code from the HMRC.
It’s a 10-digit number and it might just be called a tax reference.
This tends to arrive in the post 15 days after you register for a tax return.
Upon receiving the UTR you can then file a Self Assessment tax return online via the GOV.UK website or by post.
How much can I be fined for filing my taxes late?
You can be fined if you do not file a tax return on time.
Late filing fees are pretty steep, so make sure you get your self-assessment return in before January 31.
According to HMRC, you’ll get a £100 fine for failing to file your return a day after the deadline.
Then, a £10 daily fine applies every day you don’t submit your tax return.
This is capped at 90 days – or £900.
So, on top of the initial £100 fee, a £1,000 maximum late filing fine applies.
If you’re six months late, there’s a further £300 fine or 5% of the money you owe – whichever is higher.
That’s on top of the daily £10 charges built up so far, so there’s no shortcut to a smaller payment once you’re late.
And after 12 months, another £300 or 5% fine applies.
Interest is also added on top of this.
If you deliberately haven’t filed your tax return, a fine of up to 100% of the tax due could also be sent.