If you’ve been selling clothes or other items on Vinted, you might be wondering, “Do I need to tell HMRC about my Vinted income?”
The answer depends on a few factors, including how much you’re earning and whether it’s considered a business activity. In this post, we’ll help you understand your tax obligations when using platforms like Vinted.
Do I need to tell HMRC about my Vinted income?
Is Vinted Income Taxable?
In general, money you make by selling personal belongings isn’t taxable. For example, if you’re decluttering your wardrobe and selling clothes you no longer need, this is usually seen as a personal transaction. However, there are situations where your Vinted income could be taxable:
1. If You’re Trading
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- If you’re buying items specifically to sell for profit, HMRC may view this as a trading activity. This could apply if you’re regularly sourcing clothes from charity shops or sales with the intention of reselling them on Vinted.
- Consistent sales, frequent listings, or treating Vinted as a side business may indicate trading.
2. If Your Income Exceeds the £1,000 Trading Allowance
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- HMRC allows a £1,000 annual trading allowance. If your total income from casual sales (not just Vinted) exceeds this amount in a tax year, you’ll need to declare it, even if it’s not a full-fledged business.
How to Determine If You’re Trading
HMRC uses several criteria, often called the “badges of trade,” to determine if your activity is considered trading. These include:
- Frequency: Are you selling items regularly or as a one-off?
- Profit Motive: Are you selling for profit or simply to clear out unwanted items?
- Nature of Items: Are the items new or second-hand? Selling new or bulk items may suggest trading.
If your activity meets these criteria, it’s likely taxable.
When Do You Need to Tell HMRC About Your Vinted Income?
You need to tell HMRC if:
- Your Vinted income (combined with other casual sales) exceeds £1,000 in a tax year.
- You are buying and selling items with the intention of making a profit.
- You’re running a more substantial operation that could be considered a business.
If any of these apply, you’ll need to register for Self Assessment and file a tax return to declare your income.
How to Report Your Vinted Income
If you’ve determined that your Vinted activity is taxable, follow these steps:
- Register for Self Assessment: You must register with HMRC by 5 October following the tax year in which you earned the income.
- Keep Detailed Records: Maintain records of all your sales, costs (e.g., postage, platform fees), and any expenses that may be deductible.
- Submit Your Tax Return: Complete and file your Self Assessment return by 31 January (for online submissions).
Are There Any Expenses You Can Deduct?
If your Vinted activity is taxable, you can reduce your tax bill by claiming allowable expenses. These might include:
- Postage and packaging costs.
- Vinted platform fees.
- Costs of items purchased for resale.
- Other business-related expenses (e.g., storage or materials).
What Happens If You Don’t Report Your Income?
You should be in doubt that failing to declare taxable income is a serious offence and can lead to penalties, interest on unpaid tax, or even investigations from HMRC. It’s always better to be proactive and ensure you comply with the rules.
So, do I need to tell HMRC about my Vinted Income?
For most people, selling on Vinted to clear out unwanted clothes won’t trigger any tax obligations. However, if your earnings exceed £1,000 or your activity resembles trading, you’ll need to tell HMRC about your Vinted income.
If you’re unsure about whether your Vinted activity is taxable, we would strongly encourage you to speak to a qualified accountant or consult HMRC directly. Staying informed and compliant will help you avoid potential penalties and give you peace of mind.
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