HMRC digital platform reporting: what eBay tells HMRC about your sales

What is HMRC digital platform reporting?

HMRC digital platform reporting is a set of rules that make online platforms collect and send information about their sellers to HMRC. Digital platforms such as eBay, Vinted, Etsy and Airbnb may have to report seller details and the income sellers received through them. HMRC explains the scheme on its page about the reporting rules for digital platforms.

The rules did not create a new tax. They give HMRC information it can compare with the tax returns people file. If you already report your trading income correctly, the main change is that eBay will ask you for more details about yourself.

This guide explains the official rules in plain words. It is not tax advice, so check your own situation with HMRC or a qualified accountant.

Who does eBay have to report to HMRC?

According to HMRC, a seller of goods does not need to be reported if they made fewer than 30 sales and received 2,000 euros (about £1,700) or less in the year. Both parts have to be true for a seller to stay out of the report. In practice that means a seller can be reported if either of these applies:

• they made 30 or more sales on the platform in the year; or
• they received more than 2,000 euros through the platform in the year.

The figure is in euros because the rules come from an international framework that many countries use. The pound equivalent of about £1,700 moves with the exchange rate, so do not treat it as an exact limit.

A worked example

Example: three hypothetical sellers, to show how the test works.

Sellers B and C are both reported, yet neither is necessarily trading. Seller B may just be selling outgrown clothes, and Seller C may be selling personal possessions. The report tells HMRC that money came in; it does not decide whether tax is due.

What information does eBay share with HMRC?

To report a seller, a platform has to identify them. HMRC's guidance lists the information platforms collect, which includes details such as your name, address, date of birth or company details, a tax identification number such as your National Insurance number or Unique Taxpayer Reference, and the money you received through the platform. Read the full list on the gov.uk page above, because it differs for individuals and businesses.

This is why eBay may ask you to confirm personal details or add a tax identification number in your account. Always enter them inside your account on the official eBay site. Scammers copy official-looking messages, so do not reply to an email asking for your National Insurance number.

Keep your details accurate

• Check that the name and address on your eBay account match the ones HMRC holds for you.
• If you run a limited company, make sure the account is in the company's name with its details.
• If you share an account with a partner or family member, think about whose income is being reported.

Shared accounts deserve a closer look. If two people sell through one eBay account, the whole income is reported against the account holder. If the selling is really a joint business, or one person's personal sales mixed with the other's trading, write down who owns what and agree how it is declared. An accountant can help you set this up cleanly, which is far easier than unpicking it after HMRC writes.

Platforms also give sellers a copy of what they report, or make it available in the account. Save it each year with your records.

Does digital platform reporting mean you have to pay tax?

Not by itself. Whether you owe tax depends on whether you are trading and how much you make, not on whether eBay reported you.

Selling your own unwanted belongings for less than you paid for them is usually not trading. Buying items to resell, making items to sell, or selling regularly for profit usually is. HMRC looks at the whole picture, including why you bought the items and how often you sell.

If you are trading, individuals have a trading allowance of up to £1,000 a year of trading income. If your gross trading income for a tax year is over £1,000, you must register for Self Assessment by 5 October following that tax year, as gov.uk sets out on its trading allowance page. Note that the allowance is measured on gross income, before costs.

Valuable personal items are a separate case. Selling something like jewellery, art or a collection at a large gain can bring capital gains rules into play even when you are not trading. Check gov.uk or ask an accountant if you are selling high-value personal possessions.

How does this differ from the VAT and Self Assessment rules?

People often mix up three different tests. They measure different things and use different numbers.

For the VAT side in detail, see our guide to the VAT threshold for eBay sellers.

What are the common myths about eBay reporting to HMRC?

The reporting rules attracted a lot of confused headlines. These are the misunderstandings that cause the most worry, and what HMRC's guidance actually supports.

"There is a new tax on eBay sales"

There is not. The rules are about information. Tax law on trading income, capital gains and VAT is the same as it was; the platforms now help HMRC see who is earning.

"The 30 sales limit is a tax-free allowance"

It is not. The 30 sales and 2,000 euro figures only decide whether a platform reports you. A trader who makes 20 sales and earns £1,500 is not reported by that test, but their trading income is still over the £1,000 trading allowance and still has to be declared.

"A private eBay account keeps you out of the report"

The account type is not the test. eBay looks at the sales and income on the account. A private account that passes the reporting test can be reported just like a business account.

"Spreading sales across platforms avoids it"

Each platform applies the test to its own sales, so you might be reported by one and not another. Your tax position, though, depends on your total trading income from every source. Splitting sales between eBay, Vinted and Facebook does not change what you owe.

What should eBay sellers do now?

The right step depends on which group you are in.

If you only sell personal items

• Keep a simple note of what you sold and roughly what you paid for it, in case HMRC asks.
• Do not panic if you are reported. A report is information, not a bill.
• If you start buying things to resell, you have moved into trading. Our guide to private and business seller accounts covers the eBay side of that change.

If you are trading on eBay

1. Work out your gross trading income for each tax year, from every platform and channel.
2. If it is over £1,000, register for Self Assessment using HMRC's registration page if you have not already.
3. Keep records of sales, refunds, fees and costs, so you can show how you reached your figures.
4. Reconcile your figures with eBay's own reports. If they differ, know why: refunds, cancellations and timing are common reasons.
5. If you have not declared trading income in past years, take advice about putting it right. Coming forward yourself is usually treated better than waiting for HMRC to find it.

A quick checklist

• Read HMRC's guidance on the reporting rules for digital platforms.
• Count your sales and the money received on each platform this year.
• Decide honestly whether you are trading or selling personal items.
• Check that eBay holds your correct details, entered only on the official site.
• Register for Self Assessment if your gross trading income passes £1,000.
• Speak to HMRC or an accountant if anything in your past returns needs correcting.