Selling on eBay has become increasingly common, whether you're clearing out unwanted items, selling collectables, or running a small business. As your eBay sales increase, you might wonder: do I need to pay tax on what I sell?
Here’s what you need to know about tax and eBay sales, including the difference between occasional selling and trading, when tax may apply, and how HMRC and eBay now share data to reduce tax evasion.
Occasional Selling vs Trading
If you are only selling items from time to time, such as second-hand clothes, furniture, or gadgets, HMRC usually won’t consider you to be trading, and no tax would be due.
However, if you are buying things with the intention of selling them, regularly reselling for a profit, or running a small online shop, HMRC may treat you as a business. This can apply even if it is not your main source of income.
Signs that you may be trading include:
- You buy goods specifically to resell at a profit
- You make items to sell, such as crafts or personalised gifts
- You sell regularly and in a business-like way
- You advertise your products or take custom orders
Selling Used Items at a Loss
If you are selling personal items for less than you originally paid for them, such as books, clothes, or tech, you will not usually have to pay tax.
Example: You bought a mobile phone for £800 last year and now sell it for £400 on eBay. Since there is no profit, no tax is due.
However, even if the items are personal, selling regularly or in high volumes might still attract attention from HMRC.
Is There Such a Thing as an “eBay Tax”?
You may have heard the term “eBay tax” used online. While it is not a formal HMRC term, it is often used to describe the tax that might be due on income from selling on eBay.
There is no separate eBay tax, but if you are trading, your income could be subject to income tax and possibly National Insurance, depending on your earnings and circumstances.
The important thing is not the platform you use, but the nature of your selling activity. Whether you sell through eBay, Vinted, Etsy or Facebook Marketplace, the same tax rules apply.
Not sure if you need to pay tax on your eBay income? Use HMRC’s official tool:
👉 Check if you need to pay tax on additional income
HMRC and eBay Now Share Data
HMRC has increased efforts to identify undeclared income from online selling.
Thanks to international data-sharing agreements, eBay and similar platforms are now required to pass seller information to tax authorities. This includes:
- Seller names and contact details
- Transaction numbers and values
- Linked bank accounts
This means HMRC may already be aware of your activity, so it’s important to remain compliant and declare all taxable income.
Do I Need to Register With HMRC?
If your total trading income (from eBay and other platforms) exceeds £1,000 in a tax year, you usually need to:
- Register for Self Assessment with HMRC
- Submit a tax return by 31 January each year
Even if you think you won’t owe any tax, it’s best to check. Registering voluntarily also shows you’re acting in good faith with HMRC.
Need Help With eBay Tax?
At Taxwise Accountancy, we specialise in helping sole traders, side hustlers and small businesses remain tax compliant. We can assist you with:
- Registering for Self Assessment
- Structuring your side business properly
- Calculating your profits from eBay
- Understanding allowable expenses
- Filing your tax return correctly and on time
We’re here to make things simple for you.
Book a free consultation today or get in touch to learn more.
