Selling on Vinted is a practical way to declutter your home while earning some cash, but there’s one aspect of the sale you should understand first – Vinted tax.
The HM Revenue and Customs has already adopted stricter rules for reporting income from online selling. Your favorite platforms like eBay, Etsy, Depop, Airbnb, and Vinted, among others, are now required to report their sellers’ income directly to HMRC. So, what does this really mean if you will sell on Vinted? Let’s break it down in this guide.
What is Vinted Tax?
Vinted tax is basically an income tax you owe for earning on the online store Vinted. But, it doesn’t automatically apply to every seller, even if there’s profit. There’s a certain Vinted sales earnings threshold you need to cross first before getting charged with such tax.
It’s not a special tax just for Vinted users. Instead, it falls under the UK’s broader tax rules for selling goods online.
If you’re just selling a few unwanted items from your wardrobe, you likely won’t owe anything. However, if you’re regularly buying items to resell or running your Vinted shop like an ecommerce business, HMRC may consider your income taxable.
Understanding How You Get Taxed Selling on Vinted
Many turn to Vinted for casually selling their preloved personal items. The platform is still rapidly growing, with sellers and buyers flocking to the site in search of sustainable shopping options. In 2023 alone, the company has pulled in over £506 million in annual revenue. This is more than double its 2021 turnover.
For sellers, listing on Vinted isn’t only convenient, but also more profitable. Unlike selling on eBay, there are no listing fees. Vinted doesn’t collect commissions on any sale, either aside from the trivial Buyer Protection Fee.
Tax-wise, paying taxes shouldn’t be a burden if you’re classified as a casual seller. You fall under such classification if you’re simply selling used accessories you no longer use. This trade is considered a casual or personal transaction. Hence, your deal gets tax-exempt as the HMRC doesn’t tax non-business transactions.
So, how do you owe Vinted tax then? Let’s continue discussing Vinted tax rules below.
Vinted Tax for Business Sellers
While there are a ton of casual sellers on the platform, many are still after actual profits. After all, it’s an attractive selling platform with an international reach. Once you’re classified as a business seller, you must register as self-employed. Thus, you will be required to pay a Vinted tax through your self-assessment tax return.
Here’s how you become a business seller:
Buying to Sell: You purchase items with the main intent of selling and earning from them through Vinted.
Regular Sales: You’re no longer a casual seller if you’re frequently selling on Vinted or you sell in bulk.
Profit Motive: If your main purpose is to gain steady income instead of selling your preloved items to declutter.
How Much Can You Earn on Vinted Before Paying Tax?
As mentioned earlier, Vinted tax doesn’t apply to everyone. If you’re selling a few items now and then, chances are you won’t be affected. However, there are some thresholds that you should be aware of to avoid any surprises.
For 2025, the Trading Allowance is set at £1,000. This means that if your sales on Vinted are under £1,000 in total for the year, you don’t need to pay tax or report your earnings to HMRC. It’s as simple as that.
However, if you exceed the £1,000 threshold, it’s time to start thinking about tax. You will need to report your earnings to HMRC, and you may have to pay tax on the profits you make. If your sales exceed £1,000 but you don’t make much profit, you may still need to register for Self-Assessment and pay income tax.
It’s always a good idea to keep track of your sales and earnings so you know exactly where you stand. If you’re unsure, it’s always better to be safe and seek advice.
New Vinted Tax Reporting Rules
Starting in 2024, Vinted and other online selling platforms are required to share their sellers’ sales data directly with HMRC if the earnings surpass £1,000 in a year. This is part of a broader effort by HMRC to make sure online income is properly reported and taxed.
You won’t need to file tax returns directly with Vinted, but HMRC will have access to your sales data, including the total amount you’ve earned. This means if you exceed the £1,000 threshold, you’re likely to be contacted by HMRC.
If you’re making money on Vinted, it’s essential to keep accurate records. If HMRC notices discrepancies in your reported earnings, you could face fines or penalties, so it’s best to be honest and transparent.
Useful Tips to Stay Vinted Tax Compliant
Vinted tax can be tricky, especially with the new tax reporting rules. But, staying tax compliant shouldn’t be that complicated. Here are some tips to follow to keep your clean record with the HMRC.
1. Keep good records of your sales
It’s important to track all of your transactions. Whether you use a spreadsheet or a specific app, keeping records of what you’ve sold, the prices, and any associated costs will make it easier to file your taxes later on. If you’re unsure about what counts as a sale, it’s always a good idea to keep a copy of any messages or receipts related to each transaction.
2. Know when to register for Self-Assessment
If you’re making more than £1,000 in sales through Vinted, it’s time to register as self-employed with HMRC. This registration will allow you to submit your Self-Assessment tax return and pay any taxes owed on your earnings. Don’t leave it too late, as registering after the deadline could result in fines.
3. Set aside money for possible tax bills
If you’re regularly selling on Vinted and your earnings are above the £1,000 threshold, it’s wise to set aside a chunk of your income tax. You can use this to dodge any last-minute surprises when it’s time to pay your tax duties. Aim for around 20-30% of your profits, depending on your tax bracket.
4. Stay updated on HMRC’s rules
Tax rules can change from year to year, so it’s important to stay informed about any updates to HMRC’s guidelines. Stay on top of official announcements and HMRC updates related to online selling, so you’re always aware of what’s expected from you.
FAQs
1. What happens if I sell a lot but it’s all second-hand?
The basic principle on Vinted tax applies; it’s not affected whether you’re selling second-hand or brand new accessories. If your total earnings are below £1,000, it’s likely tax-free. However, if your earnings exceed £1,000, you will need to report them to HMRC and pay income tax.
2. How will HMRC know if I sell items on Vinted?
Vinted now shares your sales data with HMRC if you cross the £1,000 threshold. Even if you don’t report them, the HMRC will know your sales numbers. Declaring inaccurate sales records may lead to penalties, so declare your honest numbers.
3. Do I need to register as self-employed if I sell occasionally?
If you sell occasionally and earn less than £1,000, there’s no need to register. However, if your earnings exceed £1,000, you’ll need to register for Self-Assessment.
4. Will Vinted send me a tax form at the end of the year?
No, Vinted won’t send you a tax form. It’s your responsibility to track your sales and report them if necessary.
5. Can I offset expenses (like postage) against my Vinted income?
Yes, if you’re registered as self-employed, you can offset certain expenses, such as postage, packaging, and materials, against your Vinted income.
Manage Your eCommerce Tax Duties with Ease—Partner with eAccounts for Trusted Online Accounting Services
Navigating the complexities of tax can be daunting, especially when you’re selling online. Don’t let tax worries take the fun out of selling on Vinted. Let eAccounts help you manage your Vinted tax duties efficiently and stay compliant with HMRC regulations. Our expert accountants specialise in online selling and can assist with everything from registering for Self-Assessment to filing your tax returns accurately. We’ll ensure you never miss a deadline and that you maximise your allowable expenses.
Reach out to eAccounts today!
