A significant change took effect at the start of 2024 , requiring digital platforms to share sales data with HMRC. While this is not a new tax , it changes how online marketplaces report seller information.
What’s Changing?
Digital platforms like eBay, Vinted, and Airbnb must provide HMRC with data on sellers who:
- Sell over 30 items in a year, or
- Earn at least £1,700 in sales revenue.
Platforms must submit this data by the end of January 2025 .
Do You Need to File a Self Assessment Tax Return?
The sharing of sales data does not automatically mean you need to submit a tax return. However, you may need to register for Self Assessment and pay tax if:
- You make more than £1,000 in self-employment income in a tax year.
- You buy goods for resale or make items with the intention of selling them for profit.
- You provide services via a digital platform (e.g., delivery driving, holiday rentals ).
- You generate more than £1,000 in total income from online trading or services before deducting expenses.
Additionally, you must complete a Self Assessment tax return if:
- You have income from abroad that you need to pay tax on.
- You live abroad but earn income in the UK.
- You rent out a room in your home and earn more than £7,500 per year .
Key Takeaways
- Late filing and payment penalties add up quickly , so submitting on time is crucial.
- Making a tax payment early can help reduce interest charges, even if you haven’t completed your return.
- Online sellers should be aware of the new reporting rules and assess if they need to register for Self Assessment.
- Be cautious when reducing payments on account , as HMRC may reinstate them, leading to additional interest charges.
Staying informed about these changes can help you avoid penalties and ensure you meet your tax obligations on time. If you are unsure about your tax position, seeking professional advice can help you stay compliant with HMRC regulations.
For more information on how we can help you navigate these challenges, contact Chart Accountancy today. We’re here to support you every step of the way.
