Depop and Vinted sellers to be affected by new HMRC tax rule

The start of a New Year is always fresh and exciting, with individuals creating New Year’s resolutions to find love, get healthier, and become wealthier. However if your New Year’s resolution was to earn more money, the new tax clampdown starting from January first is not want you want to hear.

In an effort to eradicate tax dodgers, a new rule has been set in place that individuals earning over £1,000 from online businesses must register as self-employed and file a self-assessment tax return at the end of the financial year. The rules have been signed up to by the UK via the Organisation for Economic Coorporisation, and have been introduced under section 349 of the Finance (No.2) Act 2023. Individuals that have earnt under £1,000 from these digital platforms should not have to declare or pay tax, however should keep copies and documentation of their receipts in case they are asked to provide evidence.

These online businesses are ranging from second-hand shopping platforms such as Ebay, Vinted, and Depop, alongside Airbnb, taxi hire, food delivery platforms, and freelance work.

We all know Depop and Vinted used to be excellent for online shopping on a budget, however in recent years the platforms have been taken over by individuals selling items at a skyrocketed price, making them a huge profit. Although this new tax rule is not ideal, it may make shopping on these platforms more affordable again. However, many enraged sellers have taken to social media to express their annoyance at the new tax clampdown, explaining that many sellers are students trying to make extra money, and individuals that can’t get by on just their salary alone. Alongside these comments, social media users are stating that people using these platforms aren’t the ones committing tax evasion, and instead these rules should be implemented on the rich.

The Chief executive of Vinted, Adam Jay, told the BBC that not many individuals on the platform will actually be affected by this new rule, and it has been stated that if a seller has completed under 30 transactions they will also not be affected.

If you are an active user on these selling platforms, it may be time to rethink your side hustle.

By Emma Foakes