Do I Pay Tax on My eBay, Etsy or Vinted Sales in 2026/27?

If you are only selling your own unwanted possessions on eBay, Vinted or Facebook Marketplace, you will usually pay no tax at all. But if you buy or make items to sell at a profit – or run an online shop through Etsy, Amazon or Shopify – HMRC treats you as trading. Once your total trading income passes £1,000 in a tax year, you must tell HMRC and may owe Income Tax and National Insurance. Here is how the rules work for 2026/27.

Selling your own things is not the same as trading

HMRC draws a clear line between clearing out and trading. Selling personal possessions you bought for your own use – clothes, furniture, an old phone – is not normally taxable, however many listings you post. The only exception is Capital Gains Tax, which can apply if you sell a single personal possession (or a matching set) for more than £6,000, which rarely affects everyday sellers.

You are likely to be trading if you buy goods intending to resell them at a profit, make items to sell (including hobby crafts), or sell regularly with the aim of making money. It is the intention and pattern of activity that matters, not the platform you use.

The £1,000 trading allowance

Every individual gets a £1,000 trading allowance per tax year (6 April to 5 April). If your total gross trading income from all platforms combined is £1,000 or less, you have nothing to report and nothing to pay. Go above £1,000 and you need to tell HMRC – usually by registering for Self Assessment – even if, after expenses, little or no tax is actually due.

When you complete your tax return you choose whichever is better for you: deduct the flat £1,000 allowance from your income, or deduct your actual allowable expenses (stock, postage, packaging, platform fees). You cannot do both, so sellers with real costs above £1,000 should claim actual expenses instead.

What eBay, Etsy and Vinted now report to HMRC

Under the digital platform reporting rules, online marketplaces must collect and send seller information to HMRC each January for the previous calendar year. Your details are generally not reported if you made fewer than 30 sales of goods in the calendar year or received less than 2,000 euros (around £1,700) for them. The platform must also give you a copy of what it reported.

Importantly, being reported does not mean you owe tax. HMRC uses the data to check that people who are genuinely trading are declaring their income. If you are only selling personal items, nothing changes – but keep basic records so you can show what you sold if HMRC ever asks. The full guidance is on GOV.UK: check if you need to tell HMRC about income from online platforms.

Registering for Self Assessment: key 2026/27 deadlines

If your trading income passes £1,000 during the 2026/27 tax year (6 April 2026 to 5 April 2027), the deadlines that follow are:

• 5 October 2027 – register for Self Assessment with HMRC if you have not filed a return before.
• 31 January 2028 – submit your online tax return and pay any tax owed for 2026/27.

Miss these dates and automatic penalties apply, starting at £100 for a late return even if you owe nothing. If you are unsure whether you need to register, our sole trader accountants in London can check your position and handle the registration and return for you.

Worked example: an Etsy seller in 2026/27

Maya makes and sells jewellery on Etsy as a sole trader. In 2026/27 her sales total £24,000 and her allowable expenses (materials, postage, Etsy fees, packaging) come to £9,000, leaving a taxable profit of £15,000. She has no other income. Using verified 2026/27 rates:

• Income Tax: her personal allowance is £12,570, so £2,430 of profit is taxed at the 20% basic rate = £486.00.
• Class 4 National Insurance: 6% on profits between £12,570 and £50,270 = 6% × £2,430 = £145.80.
• Class 2 National Insurance: because her profits are above £7,105, Class 2 is treated as paid at no cost, protecting her State Pension record.

Maya’s total bill for the year is £631.80, payable by 31 January 2028. Because her real expenses (£9,000) are far higher than the £1,000 trading allowance, she claims actual expenses. You can test your own numbers with our free ecommerce profit calculator.

What about VAT?

VAT only becomes an issue once your taxable turnover – your sales, not your profit – exceeds £90,000 in any rolling 12-month period. At that point you must register for VAT, charge it on your sales and file digital returns under Making Tax Digital. You can deregister if turnover falls below £88,000. Most casual sellers never get near the threshold, but successful Shopify and Amazon sellers can cross it quickly, so monitor your rolling 12-month total. Our accountants for online businesses can help you plan for registration before it becomes urgent.

Frequently asked questions

Do I pay tax if I am just selling my old clothes on Vinted?

No. Selling personal possessions you bought for your own use is not trading, so there is no Income Tax to pay and nothing to report, whatever the platforms tell HMRC. Capital Gains Tax only applies if a single item or set sells for more than £6,000.

eBay has reported my details to HMRC – what should I do?

Do not panic: reporting does not automatically mean you owe tax. Check whether you were trading and whether your gross trading income passed £1,000 in the tax year. If it did, register for Self Assessment by the 5 October deadline; if not, simply keep records showing your sales were personal items.

Can I use the £1,000 trading allowance and claim expenses too?

No – it is one or the other. Claim the flat £1,000 allowance if your actual costs are lower, or claim your real allowable expenses if they are higher. Most established online sellers are better off claiming actual expenses.

Written by the Accountactical Team — ACCA-Approved Accountants, London.

This article is general information for UK online sellers, not formal tax advice – speak to an accountant about your own circumstances before acting on it.