Side hustles: what you need to know about paying tax in the UK

"Since the start of 2024, online platforms such as Vinted, eBay and Airbnb have been required to share data with HM Revenue and Customs (HMRC) for any users who sell more than 30 items a year or earn more than about 1,700 (the threshold is set at 2,000) a year. However, this does not necessarily mean that those users owe any additional income tax."

"If you are selling old clothes or other unwanted belongings, these are classed as personal possessions, and you can sell as many of them as you like without having to pay tax on the income. The only exception is if you sell something for more than 6,000: that does have to be declared to HMRC, and you may need to pay capital gains tax on any profit."

"Other profits from trading, rent payments and freelance work do count towards your income tax calculations. This includes money earned from jobs such as tutoring, dog-walking or babysitting, or renting out any equipment that you own whether they are things you do casually or regularly."

"Proving whether you're selling personal possessions or trading can be straightforward. Be prepared to answer: are you buying items specifically to sell and make a profit? Are you selling regularly and systematically? And are you buying items, doing them up and then selling them? These questions point toward what are known as badges of trade."

Starting in 2024, HMRC receives data from platforms like Vinted, eBay, and Airbnb for users selling over 30 items or earning above £1,700 annually. However, data sharing doesn't automatically mean tax is owed. Selling personal possessions remains tax-free regardless of quantity, except items sold for over £6,000 require declaration and may incur capital gains tax. Trading activities, freelance work, rental income, and services like tutoring, dog-walking, or babysitting count as taxable income. Distinguishing between personal sales and trading depends on whether items are purchased specifically for resale, sold regularly and systematically, or refurbished before selling. Market stall profits follow identical rules but require manual record-keeping.

Read at www.theguardian.com