Tax for eBay Sellers
The first tax question on eBay is whether you're actually trading at all. Clearing out your loft is different from buying stock to resell — and HMRC now sees your eBay income directly through platform reporting.
Trading or just decluttering?
The "badges of trade" decide it. Selling your own used belongings, often at a loss, is generally not taxable; buying items to resell for profit is trading and must be reported.
One person decluttering and another flipping stock can have identical eBay sales pages but completely different tax positions.
The £1,000 trading allowance
If you are trading, the first £1,000 of sales income is covered by the trading allowance. Go over £1,000 and you must register for Self Assessment and report your income.
eBay reports to HMRC
Online platforms now share seller income data with HMRC, with the first reports due in January 2025. This creates no new tax — it simply makes your existing obligations visible.
A HMRC "nudge letter" doesn’t mean you owe tax; it means HMRC has data and expects you to check your position.
Managed Payments accounting
eBay's Managed Payments deducts fees before paying you, so reconcile from gross sale value and record the fees separately rather than booking only the net amount received.
Switching to a business account
If you are clearly trading, moving from a personal to a business eBay account keeps your records clean and your bookkeeping aligned with what you report to HMRC.
VAT once you grow
Cross £90,000 of taxable turnover on a rolling 12-month basis and you must register for VAT, charging the standard 20%, reduced 5% or zero rate as appropriate.
Common questions
Do I pay tax on selling my old clothes and household items?
Usually not. Selling your own second-hand belongings, often for less than you paid, is generally not trading and not taxable. Buying to resell for profit is a different matter.
What is the £1,000 trading allowance?
If you are trading, your first £1,000 of sales income is tax-free and need not be reported. Above £1,000 you must register for Self Assessment and declare it.
Why has HMRC sent me a letter about eBay?
eBay now reports seller income to HMRC, which sends nudge letters where the data suggests you may have tax to report. Check whether your selling counts as trading.
Get expert eyes on your tax
Book a free 30-minute Tax Health Check — we review your situation, sense-check the figures and show you where you could save.
For guidance only — this factsheet does not constitute professional advice and is not a substitute for advice based on your specific circumstances. Whilst every care has been taken in its preparation, it may contain errors for which we cannot be responsible. Figures are for the 2025/26UK tax year (England, Wales & Northern Ireland) and may change. Last reviewed 6 June 2026.