Self Assessment for eBay sellers: how to register and what records to keep

Do eBay sellers need to register for Self Assessment?

Self Assessment for eBay sellers is needed once you are trading, rather than clearing out your own unwanted things, and your gross trading income goes over £1,000 in a tax year. GOV.UK says individuals have a trading allowance, a tax exemption of up to £1,000 a year of trading income, and that 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. The UK tax year runs from 6 April to the following 5 April.

Trading on eBay usually means buying items to resell, making items to sell, or selling regularly for profit. Selling your own old possessions is generally not trading. eBay UK uses a similar line for its own rules: it says a seller must register as a business if, for example, they sell items they have bought to resell or make items to sell. This article is general guidance: check your own situation with HMRC or a qualified accountant.

Gross trading income means your total sales before costs, not your profit. If you sell £1,400 of goods in a tax year and spent £1,100 buying them, your gross trading income is £1,400, which is over the allowance, so you must register. Our guide to the £1,000 trading allowance and selling on eBay covers the allowance in more depth.

Key Self Assessment dates for eBay sellers

GOV.UK sets out these dates for the 2025 to 2026 tax year (6 April 2025 to 5 April 2026).

GOV.UK says telling HMRC late may bring a penalty, and that missing the return deadline brings a late filing penalty. Put the dates in your calendar now, not in January.

How to register for Self Assessment, step by step

1. Check you need to. GOV.UK has a tool to check whether you need to send a tax return. If your gross trading income is over £1,000, you do.
2. Register through the Self Assessment service on GOV.UK. As a sole trader, you register as self-employed. If you registered before but did not file last year, GOV.UK says you need to reactivate your account instead.
3. Wait for your Unique Taxpayer Reference (UTR). HMRC sends a 10-digit UTR, which you need to file. GOV.UK has a page that tells you when to expect a reply from HMRC.
4. Set up your online account. You will use it to file your return and see what you owe.
5. Start your records now, from the first day of trading, not when the return is due.

If you trade through a limited company, the company has its own tax obligations, and Self Assessment applies to you personally only for other income such as dividends or a salary. Our guide to sole trader vs limited company for an eBay business explains the difference.

Trading allowance or actual expenses: which to use?

Once you are over £1,000, you choose how to work out your taxable profit. GOV.UK says you can use the trading allowance instead of deducting any expenses, and that you cannot deduct any other expenses or allowances if you claim it. It also notes that if your expenses are more than your income, claiming expenses instead may be better.

Worked example

Example: suppose in one tax year you sell a hypothetical £12,000 of goods on eBay. Your costs are £7,800 for stock, £1,500 in eBay fees, £900 in postage and £200 in packaging, a total of £10,400.

• Using the trading allowance: taxable profit is £12,000 minus £1,000, which is £11,000.
• Using actual expenses: taxable profit is £12,000 minus £10,400, which is £1,600.

For a reseller, whose stock is a large cost, actual expenses usually give the lower profit. The allowance tends to suit sellers whose costs are very small, such as someone making and selling low-cost handmade items. Whether a profit leads to tax depends on your other income and personal allowance, which is why the return is worked out as a whole. Our guide to allowable expenses for eBay sellers lists what can be claimed.

What records should eBay sellers keep?

GOV.UK says sole traders must keep records of their business income and expenses for their Self Assessment return. It lists records of all sales and income, all business expenses, VAT records if you are VAT-registered, PAYE records if you employ people, and records about your personal income. Proof can include receipts for goods and stock, bank statements, and sales invoices.

For an eBay business, that means keeping:

• Sales: every order, with date, item, price, postage charged and any refund. Seller Hub reports and your eBay payout reports give you this.
• eBay fees: final value fees, listing fees, promoted listing fees and shop subscription, from your monthly invoices.
• Stock purchases: supplier invoices and receipts for everything you buy to resell.
• Postage and packaging: label receipts and packaging supplier invoices.
• Other costs: software subscriptions, phone and internet in proportion to business use, equipment.
• Refunds and returns: what was refunded and whether the item came back.
• Bank records: statements for the account your eBay payouts go to.

How long to keep records

GOV.UK says you must keep your records for at least 5 years after the 31 January submission deadline of the relevant tax year. For the 2025 to 2026 tax year, with an online deadline of 31 January 2027, that means keeping records until at least 31 January 2032. Download eBay reports regularly rather than relying on being able to fetch them years later.

Cash basis by default

GOV.UK says that from the 2024 to 2025 tax year, cash basis is the default. Under cash basis you only record income or expenses when you receive money or pay a bill. You can opt out and use traditional accounting, where income and expenses are recorded when you invoice or are billed. Most small eBay sellers find cash basis simpler.

What eBay tells HMRC, and what is coming next

Two other rules affect eBay sellers' records.

• Digital platform reporting. GOV.UK says digital platforms such as eBay may have to report seller details and income 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. Being reported does not create a tax bill by itself, and not being reported does not remove your duty to declare income. See our guide to HMRC digital platform reporting.
• Making Tax Digital for Income Tax. GOV.UK says sole traders and landlords must use Making Tax Digital for Income Tax from 6 April 2026 if qualifying income in 2024 to 2025 was over £50,000; from 6 April 2027 if it was over £30,000 in 2025 to 2026; and from 6 April 2028 if it was over £20,000 in 2026 to 2027. Digital records and compatible software then become a requirement.

Separately, watch your turnover for VAT. A UK business must register for VAT if its VAT taxable turnover for the last 12 months goes over £90,000, or is expected to go over £90,000 in the next 30 days alone.

A monthly Self Assessment routine

A short routine each month saves a stressful January.

1. Download your eBay sales and payout reports for the month.
2. Download your eBay invoice for the month's fees.
3. File supplier invoices and postage receipts in one folder per month.
4. Update a simple spreadsheet or bookkeeping app with income and costs.
5. Note any stock you still hold at the month end, if you use traditional accounting.
6. Check your running turnover against the trading allowance, the VAT threshold and the Making Tax Digital thresholds.
7. Set aside a share of each month's profit for tax.

Read the full rules on registering for Self Assessment on GOV.UK and the GOV.UK guide to business records if you're self-employed.