HM Revenue & Customs is bringing in a new tax rule at the beginning of the New Year for people who make extra money via online retailers, such as Vinted, Etsy and eBay. From Monday, January 1, online selling and reselling platforms will be told to record how much money individuals are making on their sites and report it to HMRC.

The change also includes sites such as Uber, Deliveroo, Fiverr, AirBnb and TaskRabbit. Brits can earn £1,000 in additional income each tax year alongside your everyday job, this is what is known as your Trading Allowance.

However, if you end up making more than £1,000, you need to report it to HMRC through self-assessment and you’ll need to pay tax. Brits will not need to declare additional earnings under £1,000.

If you already report your extra earnings to HMRC, this rule change won’t impact you. HMRC’s change will affect people who are not doing this or under-reporting their earnings.

According to MirrorOnline, HMRC is set to invest nearly £37million in this initiative and employ 24 full-time staff to launch and enforce the new measures, which aim to "bear down on detect and tackle tax evasion".

Mike Parkes, Technical Director at GoSimpleTax, said: “Selling via platforms like Vinted, Etsy and Depop can be a great way to earn an extra income and often that falls below the casual income bracket. Yet for some it can quickly add up and those earning above this will still need to pay tax on what they earn.

“Earning £1,000 in a year might seem like a large amount, but that can easily be exceeded if you earn more than £84 a month across a year. Selling large items, second hand designer clothes and accessories or even unwanted baby clothes could see this capped amount of casual income easily be met, and many won’t realise that they need to be liable for tax and income payments to HMRC if they earn above this limit set by the Government.”

There are a number of different ways you can find out whether you need to register for self-assessment and the registration process itself. You can find out if you need to register for self-assessment on GOV.UK. If you do need to register, you can do so online or by calling the self-assessment helpline on 0300 200 3310. You need to register by October 5, 2024, for the 2023/24 tax year.