Tax returns for online sellers.
People selling on eBay, Etsy, Amazon, Vinted and their own websites. Marketplaces now report seller income to HMRC, so it is worth getting your tax position right.
What to know
Marketplaces now report seller income to HMRC, so it is worth getting your tax position right.
If your sales are a trade, you need to report the profit. Below £1,000 of income the trading allowance may mean no tax and no return.
Costs you can usually claim
- Cost of stock and materials
- Platform and payment fees
- Postage and packaging
- Storage and workspace costs
- Software and website costs
- Advertising and marketing
Authorised and regulated
Is Cheap Tax Returns authorised and regulated? Yes.
Your return is prepared by qualified UK accountants holding qualifications from the leading accountancy bodies: ICAEW, ACCA and AAT. We are also on the ICAEW approved employers list, so you can file with confidence.
Regulated by the professional bodies. Reviewed by qualified accountants. Part of Accotax.
Prepared by accountants you can trust.
In depth
Tax returns for online sellers: what to know
Selling on eBay, Etsy, Amazon, Vinted or your own shop can create a tax bill sooner than many sellers expect. This is how it works.
When does online selling become a trade?
HMRC looks at the badges of trade: how often you sell, whether you buy to resell, the profit motive and how organised the activity is. Clearing your own belongings is not trading. Regularly buying and reselling, or making goods to sell, usually is, and the profit is taxable.
Do marketplaces tell HMRC about my sales?
Yes. Under the digital platform reporting rules, online marketplaces now send HMRC details of sellers who meet certain thresholds. It is worth getting your tax position right before HMRC asks.
Which costs can online sellers claim?
Stock you bought for resale, postage and packaging, platform and payment fees, advertising, equipment, software, storage and a proportion of home costs where you work from home. Keep a stock record so your cost of goods is accurate.
What about VAT and the trading allowance?
Below £1,000 of trading income the trading allowance may mean no tax and no return. You must register for VAT if taxable turnover exceeds £90,000 in 12 months, including sales made through several marketplaces.
Why use Cheap Tax Returns for online sellers?
Cheap Tax Returns is part of Accotax, a UK accountancy practice. Our fees are fixed and quoted in writing before we start, the return is prepared by an accountant and checked before filing, and we work online with clients anywhere in the UK. Our team holds ICAEW, ACCA and AAT credentials. For a free quote call 0203 4411 258 or email [email protected].
At a glance
Online sellers at a glance
Claimable costs
- Stock bought for resale
- Postage, packaging and delivery
- Platform, listing and payment fees
- Advertising and software
Records to keep
- Marketplace sales reports
- Purchase invoices and receipts
- A stock and cost of goods record
- Payment processor statements
Common mistakes
- Treating payouts as profit
- Ignoring sales on a second platform
- Not keeping stock records
- Missing the VAT threshold
Questions, answered.
Selling your own unwanted items is not usually trading. Buying to sell on for profit is.
Digital platforms now share seller information with HMRC under reporting rules that began in 2024.
Selling your own unwanted items is not usually taxable. Buying items specifically to resell for profit generally is.
You pay tax on profit, not on payouts. Fees, refunds and stock costs are deducted before tax.
It is not a legal requirement for sole traders, but a separate account makes your records far easier to prepare and check.
Know your price before we start.
- Fixed fee confirmed in writing before any work begins
- ICAEW, ACCA and AAT-qualified accountants
- Filed with HMRC and confirmed, so you have proof
- A real person on the phone: 0203 4411 258