Sold more than 30 items on Vinted? You may need to file a tax return

Brits who own an AirBnB or sell on Vinted have been given new guidance by HMRC on the so-called Side Hustle Tax, which came into effect this January.

The rules are designed to help HMRC spot discrepancies between platform users’ reported income, and what users have filed in their annual self-assessment tax returns. 

The guidance makes clear that certain ‘low-risk’ users will not be considered reportable. Below, we’ll explain who is eligible for the new tax law, what information you’ll be required to submit, and what it means for your side gig.

The Side Hustle Tax that isn’t a tax

Its name suggests otherwise; but the Side Hustle Tax law is not actually a tax. Instead, the rules ensure digital platforms collect information about sellers and report this to HMRC.

People who make less than £1,000 a year are not required to submit a tax return as this is under the Trading and Miscellaneous Income Allowance. But many gig workers will make more than this amount, especially as inflation has led to a hiked minimum wage this year.

As a result, when the new laws were introduced, they immediately caused confusion about the impact on gig workers, such as Deliveroo and Uber drivers. 

Those who make a quick buck selling secondhand goods on resell platforms such as Vinted, or handmade goods on marketplaces like Etsy, were also confused about whether they would suddenly receive a huge tax bill in the mail.

Side Hustle Tax: am I eligible?

The new guidance from HMRC attempts to clear up some of the confusion. It clearly states that digital platforms and apps will not need to report information from sellers who:

• Make fewer than 30 sales a year
• Earn less than €2,000 (around £1,700) per year from sales

If you are just having a spring clean and trying to empty out your summer wardrobe, or clearing out your overstuffed garage, it is unlikely that you will be reported to HMRC.

If the platform does report your details to HMRC, it also does not necessarily mean you owe tax. If you sell goods or services via an app, your profits are only likely to be taxable if you are trading (buying products to resell them).

Even if you do earn over £1,000 a year and need to register for a tax return, you also won’t pay tax if you earn less than £12,570 a year from the gig, as this is under the personal allowance for income tax brackets in the UK. 

In short, the Side Hustle Tax is not about taking away from your income, but about making it clear to HMRC who does and doesn’t need to pay tax, so it’s a positive for side hustlers.

“Stay on top of your tax affairs”

The HMRC guidance explains exactly what information platforms should collect from users. As of January 31, apps such as Vinted and AirBnB now need to ask sellers for their:

• Full name
• Address where you normally live
• Date of birth
• National Insurance number
• Income earned 
• Bank details
• Address of property rented (if selling on AirBnB)

All information that the platforms collect will be reported to HMRC by the following January (January 31 2025, for this current tax year). Providers will also be required to give users a copy of this information in case they need it to submit a tax return.

Commenting on the guidance, Seb Maley, CEO of tax insurance provider Qdos, has urged side hustlers in the UK to ensure they are disclosing their earnings and tax liabilities accurately, to ensure their tax return matches with the platform’s records.

“It’s crucial that those with side hustles make sure they’re on top of their tax affairs, and report their earnings and tax liabilities accurately”, says Maley. “Otherwise, HMRC may come calling, and they won’t have an issue launching a tax investigation if anything doesn’t stack up.”