Chris Smith, our Director of Personal Tax, has commented for South West Londoner on reports that online trading platforms will be required under new regulations to share with HMRC detailed information on vendors.
The HMRC tax crackdown on users of “side-hustle” marketplace apps will not affect most people selling their pre-loved items, a tax adviser has clarified.
Chris Smith, Director at BKL Chartered Accountants & Tax Advisers, explained that the new measures will target those who are running an unregistered business for profit on the apps, not individuals selling a few old items.
Under the changes, apps such as Vinted, Depop, and Ebay will be required to supply HMRC with the bank account details and the number of transactions made by users who have earned over £1000.
Smith said: “There is a distinction between people selling the odd clothing or bit of craft they no longer want and actually running a business by buying from charity shops or car boot sales to resell for a profit.
“Effectively, HMRC are saying, ‘We are okay with a small side hustle where income is up to £1,000; if it is over £1,000 then you may need to pay tax.’”
Smith stated that the new measures simply reflect HMRC keeping up with trends in the digital space to ensure they have the powers to be able to track down individuals who do not report their taxable income.
The full article is available here on the South West Londoner website.
To find out more about the tax implications of your trading activities, please get in touch with your usual BKL contact or use our enquiry form.
Read more about the online trading platforms’ rules for reporting to HMRC in our article here.