How much can I sell on eBay without paying tax in the UK?

Joe Wright

Mon, 23 February 2026 at 9:27 pm GMT+9 10 min read

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British sellers make thousands of pounds from their eBay “side-hustle” every year – but many are unaware that they could have to pay tax on their earnings.

Since 2025, eBay – and other selling platforms like Vinted, Etsy and Depop – have been required to report sellers’ information to HMRC, leaving many UK sellers asking: how much can I sell online without paying tax?

The rules are not necessarily straightforward, varying depending on what you’re selling, your reasons for selling it, and your other income streams.

In this guide, Telegraph Money explains the latest rules, what eBay reports, and how the trading allowance works.

We will cover the following topics:

What does eBay report to HMRC?

Is this a new “side hustle tax”?

How much can you earn on eBay before tax in the UK?

Do you need to declare eBay sales to HMRC?

What happens if you don’t declare your eBay earnings?

How to minimise tax on eBay sales

Online selling FAQs

What does eBay report to HMRC?

Online marketplace eBay is required by law to report some sellers’ information to HMRC. When this rule came into force, it sparked fears that taxpayers would have to cough up extra – but this is not the case.

British sites were already required to provide sales data to HMRC, but the change mean American web sellers had to start doing the same.

This changed after the UK signed up to a global effort run by the Organisation for Economic Cooperation and Development (OECD), which requires American platforms to collect and report information about any income made by their users.

This means sites such as eBay, Depop, Etsy and Vinted are also required by law to share sellers’ information with the authorities.

Is this a new ‘side hustle tax’?

No, this is not a new or additional tax, and it won’t affect the vast majority of sellers.

Those who sold at least 30 items, earned around £1,700 or provided a paid-for service on a website or app in a year, will typically see their sales data and some personal information shared with HMRC.

But eBay has stressed to users there isn’t a new “side hustle tax”, and the average person selling second-hand items won’t be stung by extra charges.

Rules about who needs to declare income through a self-assessment tax return have not changed.

Chris Etherington, of accountancy firm RSM, said: “This is about putting the onus on digital platforms to share information with HMRC – there aren’t any changes for sellers.”

So-called “side hustles” have grown in popularity in recent years but people, intentionally or not, have been able to slip through the net and avoid tax.

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It is hoped the new rules will make it easier for HMRC to target sellers who have so far been trading under the radar.

HMRC, which is investing £37m into the project and employing 24 extra staff members, said the initiative will “help us detect any deliberate non-compliance, ensuring a level playing field for all taxpayers”.

How much can you earn on eBay before tax in the UK?

Working out how much you can earn selling items online before paying tax is largely dependent on what you’re selling, your reasons for selling it, and your other income streams.

For most people selling a limited number of unwanted personal items, there will be no tax bill to foot. However, if you’re regularly selling items for profit, in other words, running a “side hustle”, then other rules apply.

Let’s break down the rules regarding both scenarios:

1. Selling your own personal possessions (casual selling)

If you’re primarily selling your own unwanted personal items – things like old clothes, books, furniture, or electronics you no longer need – you generally do not pay income tax on the money you make. This is because:

You are not usually “trading”: HMRC typically views this as simply disposing of personal belongings.

You often sell items for less than you originally paid for them: If there’s no profit, there’s no income to tax. These are known as ‘chattels’ – tangible, movable property. If a chattel is sold for less than its purchase price, it does not create taxable income.

As Victoria Todd, head of the Low Incomes Tax Reform Group (LITRG), explained: “People selling unwanted personal items such as their children’s old clothes or toys are not likely to be trading. Therefore, even if it is a significant amount, any money they make is generally not taxable.”

If you’re selling valuable items – loosely termed as being worth £6,000 or more – could mean you’ll have capital gains tax to pay if you make a profit. See our capital gains tax guide for more information.

2. Trading on eBay (buying to resell or making items to sell for profit)

If your eBay activity is more like a business – for example, you buy items specifically to resell at a profit, or you make and sell crafts regularly – then your earnings are considered trading income and are potentially subject to income tax.

Here’s how allowances apply:

The £1,000 trading allowance

You can earn up to £1,000 in gross income (total sales before deducting any expenses or eBay fees) from your trading activities each tax year (April 6 to April 5) without having to declare it to HMRC or pay income tax on it.

If your gross trading income from all such “side hustles” is more than £1,000, you must register for self-assessment and declare this income to HMRC on a tax return.

Mr Etherington said: “Perhaps for those who haven’t really appreciated what they’ve been doing is a taxable activity, this gives them more reason to review their affairs, get them in order and report them to HMRC if required.

“Sellers going above the trading allowance should already have been doing it – but undoubtedly there are people out there who don’t realise it’s a taxable activity.

“HMRC will now be getting the data, so if you haven’t been reporting it correctly, expect to hear from them.”

When you fill out your tax return, if your gross trading income is over £1,000, you can then choose to deduct either the £1,000 trading allowance or your actual allowable business expenses (such as eBay fees, postage, cost of goods sold) from your gross income to work out your taxable profit. You cannot deduct both for the same income.

Your personal allowance (income tax)

Once you’ve calculated your taxable trading profit from eBay (after deducting the trading allowance or actual expenses), this profit is added to any other taxable income you might have (such as salary from a job or pension income).

Your personal allowance applies to your total taxable income from all sources. For the 2025-26 tax year, the personal allowance is £12,570.

Do you need to declare eBay sales to HMRC?

As outlined above, your transaction data may be shared with HMRC automatically, but this won’t include a large number of sellers who do not frequently use online platforms. In this case, you may not need to declare sales.

Ms Todd said: “The new rules have caused a great deal of confusion, but they simply mean that HMRC is receiving more information from online platforms than they were before.

“If you are following existing rules and declaring your income as required, then you don’t need to worry, or do anything differently.”

However, you might want to bear the following allowances and taxes in mind:

Expenses

If you have to pay tax on your platform sales, you can also claim for expenses – that is, the things you had to pay for to make those sales. This could include the cost of any thank you cards, stickers or other decorative packaging you use when you make a sale.

If you sell an item that’s subject to capital gains tax, you can take off expenses for things you’ve paid for that were necessary for the sale, such as if you had to get the item cleaned before it was ready to sell.

VAT

Not one for the average seller, but useful to know nonetheless. There’s a 20pc VAT charge on most goods and services in the UK, but you must usually register for VAT if your total taxable turnover for the last 12 months goes over £90,000 (or if you expect it to go over £90,000 in the next 30 days).

Once registered, you’ll need to submit a VAT return four times a year, and start charging VAT on what you sell. You will, however, be able to reclaim the VAT you pay as part of your business.

When “selling” becomes “trading”

There are a number of tests, or “badges of trade”, that can be applied by HMRC to determine whether sales qualify as trading.

They are detailed as follows:

What happens if you don’t declare your eBay earnings?

As mentioned above, in some cases eBay (and other platforms) will disclose your sales to HMRC, meaning that not declaring will not be an option.

You will still be responsible for making sure the details HMRC holds about you are correct, and making sure you detail your profits as part of a tax return if you need to submit one.

Failing to declare your eBay earnings in a bid to pay less tax will likely count as tax evasion in the eyes of HMRC, meaning you could receive any number of penalties, from fines to court summons.

How to minimise tax on eBay sales

There are ways to organise your selling habits in order to minimise your tax bill.

For one thing, you can try to make sure any sales you make stay below your tax-free allowances in each tax year.

The key is to be aware of your selling activity, and know that any money you make can form part of your taxable income.

If you have other forms of income – a job or pension, for example – then it’s more likely you’ll need to pay tax on eBay sales if you exceed the £1,000 trading allowance.

While you might think that selling second-hand items and crafts online is a hobby, the taxman will class the activity as a business if it can prove you are doing “anything in the nature of trade”.

If you collect items and resell them in a short period of time, or sell home-made crafts online, you could be classed as a business.

HMRC’s guidance says: “Evidence that the sole object of acquiring an asset was to re-sell it at a profit, without any intention of holding it as an investment, is a pointer to the conclusion that a trade is being carried on.”

eBay has said that if you’re clearing out and selling your personal possessions, you are very unlikely to owe tax.

What do online sellers need to do?

New online sellers will be required to share tax information, which the platform may then be required to report to HMRC. For individual consumer sellers, this will be your National Insurance number.

All existing individual sellers must have updated their profiles to include a NI number for the same purpose.

For those selling on eBay, it told us it “remains” a site where users can “easily sell their items”.

A spokesman said: “eBay is working closely with our sellers to educate them on the changes, which won’t affect their existing tax obligations.

“We’ve launched online help and information pages outlining exactly what information we’ll need to collect, along with how their data is being robustly protected.”

Sellers will be notified by eBay if and when they cross the thresholds which require their details being shared with HMRC.

Online selling FAQs

What is the HMRC limit on eBay sales?

HMRC does not place a particular limit on eBay sales, but if you earn more than the £1,000 trading allowance then the money you make from the sales could be subject to income tax.

Does eBay report sellers to HMRC?

eBay reports certain seller information to HMRC when UK digital sales reporting thresholds are met. For UK residents, eBay says reporting applies if you complete 30 or more sales transactions in a calendar year, or your total sales are £1,740 or more (after deducting fees, commissions or taxes). HMRC has also described the sales threshold as roughly £1,700.

Do private sellers pay tax on eBay?

Private sellers can pay tax on the money they make from selling goods on eBay if the income they receive exceeds their tax-free allowances.

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