eBay Tax Calculator

When is eBay/Vinted/Etsy income taxable?

Two situations to distinguish:

• Selling personal possessions (old clothes, used items) — usually NOT taxable trading. Could trigger CGT only if a single item sells for over £6,000.
• Trading for profit (buying to resell, making things to sell, dropshipping) — fully taxable as self-employment.

Trading is determined by the "badges of trade" — frequency of sales, profit motive, alteration of items, etc. HMRC publishes guidance.

How online seller tax is calculated

If you're trading, you pay normal sole-trader tax on profit:

• Profit = sales − cost of goods − fees − postage − packaging
• The £1,000 Trading Allowance applies first — under this and you don't need to register or file
• Above £1,000, register as self-employed and file Self Assessment
• Income tax (20%/40%/45%) + Class 4 NI (6%/2%) on the profit

Platforms (eBay, Vinted, Etsy, Depop, Airbnb) now share data with HMRC under DAC7 — annual reports of seller totals to HMRC, automated since 2024.

When DAC7 reporting kicks in

Platforms must report any seller who has either:

• 30+ transactions in a year, OR
• Total sales over €2,000 (~£1,700)

Below those thresholds, no automatic report — but you're still legally required to declare trading income above the £1,000 Trading Allowance.

Online seller tax planning

• Use the Trading Allowance if your sales are under £1,000/year
• Track all platform fees + postage + packaging — fully deductible
• Home-office allowance if you store/photograph stock at home
• Cost of goods sold — keep receipts even for items bought before you started trading
• Mileage for trips to post office, suppliers, photo shoots at 45p/mile