HMRC is now going to be receiving information about profits from online selling platforms such as TikTok, Etsy, Depop and Vinted. So far, no new tax has been introduced in relation to this, there is a continuation of being subjected to income tax and NI on any profits gained from trading.
If your profits exceed £1000, you have to report the income and expenses to HMRC with your self-assessment tax return, even if there is no tax to pay! If online selling is a secondary income source, you still are allowed to earn up to £1000 as a self-employed individual tax free, even if your earnings from your main job exceed the personal allowance (£12,570 per year).
So, if you are using these selling sites, you need to recognise if you are trading or not. If you make a profit on any item you are trading. If you are making goods, such as plant pots and selling them on Etsy, you are trading. On the other hand, if you are selling unwanted gifts or secondhand clothes you are unlikely to be trading because you are unlikely to be making a profit!
Come along to the office for a chat and a cup of tea if you have anything on your mind- we would be more than happy to see you!