You cleared out your wardrobe, listed a few things on Vinted, and the money started coming in. Then you read that Vinted now reports seller data to HMRC, and the worry set in. Do you owe tax? Are you suddenly a business?
Most people clearing out their own clothes owe nothing. But the line between "having a sort-out" and "running a resale business" is a real one, and HMRC has a long-established test for which side you're on. It's called the badges of trade.
This guide explains those badges in plain English, walks through how they apply to a Vinted seller, and shows you the two allowances that decide whether you pay anything. It's written for casual sellers, side-hustlers, and anyone who has started buying stock to resell. By the end you'll know exactly where you stand for the 2025/26 tax year.
Am I trading or just decluttering?
If you're selling your own used belongings that you originally bought to use, not to resell, you're almost certainly not trading and you owe no Income Tax on the proceeds. If you buy or make goods with the intention of selling them at a profit, you are trading, and the income is taxable once it passes the £1,000 trading allowance.
That's the headline. HMRC puts it simply: selling personal items from your home, like the contents of a loft or garage, is unlikely to create a tax bill, while buying or making goods to sell at a profit is trading. The hard part is the grey area in between, and that's exactly what the badges of trade are designed to sort out.
What are the badges of trade?
The badges of trade are a set of indicators the courts and HMRC use to decide whether an activity counts as trading. No single badge settles the question. HMRC weighs them together and forms an overall impression, so a few pointing towards trade can be outweighed by the rest pointing the other way.
The concept began with a 1955 Royal Commission, which set out six badges, and was later refined to nine in the 1986 case Marson v Morton. HMRC's Business Income Manual now lists these nine:
| Badge of trade | What HMRC looks at |
|---|---|
| Profit-seeking motive | Did you intend to make a profit? Helpful but not conclusive on its own. |
| Number of transactions | Systematic, repeated sales point towards trade. One-offs point away. |
| Nature of the asset | Does the item only earn you money on resale, or did it give you personal use or enjoyment? |
| Existence of similar transactions | Does the sale resemble trades you already carry on? |
| Changes to the asset | Did you repair, alter or repackage it to make it more saleable? |
| The way the sale was carried out | Was it sold in a businesslike way, the way a trader would sell it? |
| The source of finance | Did you borrow to buy the goods, expecting to repay from the sale? |
| Interval between purchase and sale | A quick resale points towards trade. Long ownership points away. |
| Method of acquisition | Items you inherited or were given are less likely to be trading stock. |
HMRC is explicit that "the presence or absence of a particular badge is unlikely, by itself, to provide a conclusive answer." It's the picture as a whole that matters.
How do the badges apply to a Vinted seller?
Run your own activity through a handful of the badges and the answer usually becomes obvious.
The clear "not trading" case
You're selling clothes, shoes and bags you bought to wear, then fell out of love with. There's no profit motive (you're often selling at a loss against what you paid), you bought the items for personal use, you didn't alter them to boost their value, and you've owned most of them for years. Almost every badge points away from trade. You're decluttering.
The clear "trading" case
You spotted that vintage Levi's sell well, so you now buy job lots from car boot sales and charity shops, sometimes wash, repair or restyle them, and list them on Vinted to sell for more than you paid. Profit motive, repeated transactions, changes to the asset, a businesslike sales method, and a short gap between buying and selling all point firmly towards trade. HMRC's own example is almost word for word this: buying from car boot sales and charity shops "with the intention of selling them for more money than you paid" is trading.
The grey area
Where it gets tricky is the in-between seller. You started by clearing your wardrobe, enjoyed it, and now occasionally buy a bargain you think you can flip. There's no magic number of sales that flips a switch, but the more your activity looks organised, repeated and profit-driven, the closer you are to trading. If that sounds like you, it's worth getting a clear read on where you stand. Our accounting support for Vinted sellers is built for exactly this situation.
Why is Vinted sending my data to HMRC?
New rules started in the UK from 1 January 2024 requiring online platforms, including Vinted, eBay, Etsy and Depop, to collect and report seller information to HMRC. This is a reporting rule, not a new tax. As HMRC puts it, being reported "does not automatically mean that you owe tax."
A platform doesn't have to report your details if, in a calendar year, you make fewer than 30 sales of goods or receive less than 2,000 euros (about £1,700) for them. Cross either limit and your details can be passed on. The platform must also give you a copy of what it sends to HMRC, so check the figures match your own records.
The takeaway: the report tells HMRC you've been active. Whether you owe anything still depends entirely on the badges of trade and the allowances below.
What is the £1,000 trading allowance?
The trading allowance lets you earn up to £1,000 of gross trading income in a tax year (6 April to 5 April) without paying Income Tax on it or, in most cases, needing to tell HMRC. It applies to your combined trading income from things like selling goods, providing services, or making online content.
The key word is gross. The £1,000 is measured against your total sales receipts before costs, not your profit. So if you bought stock for £700 and sold it for £1,200, you've used up the allowance even though your profit was only £500.
If your trading income for the year is more than £1,000, you have two choices:
- Deduct the £1,000 allowance from your income instead of claiming actual expenses (good if your real costs were low), or
- Claim your actual allowable business expenses in the normal way (usually better once you're buying meaningful amounts of stock).
You can't do both, and the allowance only matters if you're trading in the first place. Genuine decluttering of personal items isn't trading income, so the trading allowance doesn't even come into it.
Could I owe Capital Gains Tax instead?
If you're not trading, the only other way HMRC can tax a sale is through Capital Gains Tax (CGT) on a personal possession. For the vast majority of Vinted sellers, this never bites.
You may have to consider CGT if you sell a single personal possession (a "chattel") for £6,000 or more. Everyday used clothing sold for ordinary prices is nowhere near that, and many items have a limited useful life ("wasting assets") and are exempt anyway. On top of that, every individual has a Capital Gains Tax annual exempt amount of £3,000 for 2025/26, so even a rare qualifying gain may fall within it.
If a gain did exceed both the £6,000 chattel limit and your £3,000 annual exempt amount, the CGT rate on most assets for 2025/26 is 18% within the basic rate band and 24% above it. For typical second-hand clothing sales on Vinted, though, CGT simply doesn't apply.
Worked example: declutter versus side-hustle
Illustrative example. Two sellers, same platform, very different tax positions for 2025/26.
Aisha, the declutterer. Over the year Aisha sells her old coats, dresses and a handbag she bought years ago for personal use. She receives £1,450 in total. Because these are personal possessions she's selling, not goods she bought to resell, she isn't trading. No single item sold for £6,000 or more, so there's no CGT either. Even though Vinted may report her to HMRC (she made more than 30 sales), Aisha owes nothing and has nothing to declare.
Ben, the reseller. Ben buys vintage denim and trainers from car boot sales, cleans and photographs them, and sells them on Vinted at a profit. His total sales for the year come to £4,200, and he spent £1,600 on stock plus £150 on postage and packaging he covered himself.
Ben is trading. Because his gross income is well over £1,000, he claims his actual expenses rather than the trading allowance:
| Ben's figures (2025/26) | Amount |
|---|---|
| Gross sales | £4,200 |
| Less cost of stock | (£1,600) |
| Less postage and packaging | (£150) |
| Taxable trading profit | £2,450 |
Ben's £2,450 profit is taxable as self-employment income. If his other income already uses up his £12,570 personal allowance, the profit falls in the 20% basic rate band, giving Income Tax of £490 (£2,450 x 20%). He'd also need to check Class 4 National Insurance, which for 2025/26 starts at 6% on profits above £12,570, so on these figures no Class 4 is due unless his total self-employed profits exceed that limit. Ben must register for Self Assessment and report the profit.
The two sellers earned similar-looking amounts. The difference in tax comes entirely from the badges of trade.
What should I do if I am trading?
If your honest read of the badges says you're trading, here's the practical path:
- Register for Self Assessment. Tell HMRC by 5 October following the end of the tax year in which you started trading.
- Keep records from day one. Save what you paid for stock, postage, platform fees, packaging and mileage. These reduce your taxable profit.
- Watch the £1,000 line. Under £1,000 gross and you can usually relax. Over it, you'll need to report and pay tax on the profit.
- Diarise the deadlines. The online Self Assessment return and any tax due are payable by 31 January following the tax year.
Get this right early and trading on Vinted is perfectly manageable. Getting it wrong, by ignoring a reporting letter or under-declaring, is where problems start.
If you'd rather not untangle the badges of trade alone, that's what we're here for. Zmartly helps Vinted and resale sellers work out whether they're trading, register correctly, and keep more of their profit. Book a free call through our Vinted seller accounting page and we'll tell you exactly where you stand.
Frequently asked questions
Does selling on Vinted mean I have to pay tax?
Not on its own. If you're selling your own used personal items, you're decluttering, not trading, and there's no Income Tax to pay. Tax only arises if you're trading (buying or making goods to sell at a profit) and your gross trading income for the year is more than the £1,000 trading allowance, or in rare cases if a single personal possession sells for £6,000 or more and triggers Capital Gains Tax.
How many sales can I make on Vinted before HMRC is told?
A platform doesn't have to report you if, in a calendar year, you make fewer than 30 sales of goods or receive less than 2,000 euros (about £1,700). Above either limit, Vinted can pass your details to HMRC under rules that started on 1 January 2024. Being reported doesn't automatically mean you owe tax, it just means HMRC knows you've been active.
What is the £1,000 trading allowance?
It's a tax-free allowance of £1,000 of gross trading income per tax year. If your total trading receipts (before costs) stay under £1,000, you usually don't need to report them or pay tax. Above £1,000, you can either deduct the £1,000 allowance or claim your actual business expenses, whichever leaves you better off, but not both.
I sometimes buy items to resell. Am I trading?
Probably, yes. Buying goods with the intention of selling them at a profit is a strong badge of trade, and HMRC uses buying from car boot sales and charity shops to resell as its own example of trading. The more regular, organised and profit-driven your activity, the clearer the trade. If you're unsure, run your activity through the badges of trade above or speak to an accountant.
Could I owe Capital Gains Tax on my Vinted sales?
For everyday second-hand clothing, no. Capital Gains Tax on a personal possession only comes into view if you sell a single item for £6,000 or more, and many items are exempt as wasting assets. Even then, the annual exempt amount is £3,000 for 2025/26, so most one-off sales fall outside the charge entirely.
