Do you pay tax on reselling in the UK?
Search this question and you get two kinds of answer. Panic ("HMRC is coming for your side hustle") or a shrug ("it depends"). Neither helps you decide whether to register.
Here is the actual position, checked against gov.uk. Every claim below links to the page it came from.
The short answer
You pay tax on reselling if you are trading, and your gross trading income for the tax year is more than £1,000.
Two words there matter. Trading is not the same as selling. Gross means the money that came in, before you take off postage, fees or what you paid for the stock.
Decluttering is not trading
Selling your old console, your kids' outgrown Lego, the contents of the loft. That is disposing of personal possessions. HMRC's own wording is blunt: "You're unlikely to pay tax if you sell personal items from your home, like contents of a loft or garage."
Buying something in order to sell it at a profit is different. HMRC says that if you "buy or make goods to sell at a profit, you're likely to be trading". Queuing for an Elite Trainer Box you never intended to open is trading. It does not matter that it is a hobby, or that you only do it at weekends.
If the line is genuinely unclear in your case, HMRC decides it using the badges of trade, nine indicators from case law, set out in the Business Income Manual:
- Profit-seeking motive
- The number of transactions
- The nature of the asset
- Existence of similar trading transactions or interests
- Changes to the asset
- The way the sale was carried out
- The source of finance
- Interval of time between purchase and sale
- Method of acquisition
No single badge decides it. HMRC weighs the overall picture. But read that list honestly against a typical reselling year, repeat purchases, bought to sell, sold quickly, listed like a shop, and the answer is usually obvious.
One separate rule worth knowing: if you sell a personal possession for more than £6,000, Capital Gains Tax may apply. That is a different tax from the one above and it catches the odd high-value collection.
The £1,000 trading allowance
The trading allowance is £1,000 of gross trading income per tax year (6 April to 5 April), tax free.
- Under £1,000 gross across all your trading activity: nothing to report.
- Over £1,000 gross: you must tell HMRC, even if you made no profit.
You then choose one of two routes. Deduct the £1,000 allowance from your gross income and claim nothing else, or claim your real expenses instead. You cannot do both. If you turned over £4,000 and spent £3,200 on stock and postage, claiming real expenses is worth far more than the allowance.
The government has announced an intention to raise this reporting threshold to £3,000 gross. It is not in force. Plan around £1,000.
When Self Assessment is required
You must send a Self Assessment tax return if you were self-employed as a sole trader and earned more than £1,000 before deductions.
The deadline people miss is the registration one, not the filing one. Register by 5 October following the end of the tax year in which you passed £1,000. So if you crossed the line in the 2026 to 2027 tax year, register by 5 October 2027.
What the platforms tell HMRC
Since 1 January 2024, digital platforms report seller data to HMRC directly. This is not a rumour and it is not optional for them.
If you sell as an individual, the platform collects your full name, the address where you normally live, your date of birth, and your National Insurance number. It reports those details plus your income on the platform. Reports cover the calendar year and are due to HMRC by 31 January following it.
The platform must also send you a copy. That report shows your total earnings for the calendar year, less fees, commission or taxes the platform took, broken down by quarter. Useful, but note it is a calendar year and your tax year runs 6 April to 5 April, so you cannot just copy the figure across.
Small sellers are excluded. Your details are not reported if you make fewer than 30 sales of goods in a calendar year and receive less than 2,000 euros, about £1,700, for them.
Two things follow from that. Being reported does not mean you owe tax; gov.uk says so explicitly. And staying under 30 sales on one platform is not a plan, because the trading rules apply to your total activity regardless of what any platform reports.
Expenses you can actually claim
If you claim real expenses rather than the allowance, the allowable list includes stock or raw materials for resale, postage and packaging, platform and payment fees, travel costs, advertising, insurance and bank charges, and a proportion of home and phone costs.
Keep it defensible. Petrol to a retail park for a restock run is a business cost. The meal you bought while you were there is not.
Records, and how long to keep them
Keep records of business income and expenses. In practice that means purchase receipts, platform sales exports, postage receipts, fee statements, and a note of what you paid for anything you bought before you started treating it as stock.
The retention rule is specific: keep records for at least 5 years after the 31 January submission deadline of the relevant tax year.
A spreadsheet with date, item, cost, sale price, fees and postage is enough for most people. Start it on day one. Reconstructing two years of eBay history in January is miserable.
This is general information, not tax advice. Your circumstances change the answer. An accountant who deals with sole traders costs a few hundred pounds a year and will find that back in expenses you did not know to claim, cheap relative to getting it wrong and paying penalties on top.
Common questions
Do I have to pay tax on reselling in the UK?
You pay tax if you are trading and your gross trading income for the tax year exceeds £1,000. Buying goods in order to sell them at a profit is trading; selling your own possessions is not.
Does the £1,000 allowance apply to profit or turnover?
Gross income, not profit. Selling £1,200 of stock that cost £900 puts you over the threshold even though you made £300, and it covers all your trading combined rather than each platform separately.
Does eBay report my sales to HMRC?
Yes. Since January 2024, online platforms including eBay and Vinted report seller data to HMRC directly under the digital platform reporting rules. Assume your figures are visible.
Is selling my own old items taxable?
No. Disposing of personal possessions is not trading. HMRC's guidance is that you are unlikely to pay tax selling personal items such as the contents of a loft or garage.
Should I be a sole trader or a limited company?
Sole trader suits almost every reseller. A limited company generally only starts to pay for itself once profits are comfortably into five figures, because the annual accounting cost has to be earned back first. Sole trader or limited company covers where the line sits.
Where this connects
Tax is decided by your margin, and margin is decided at the moment you buy. Paragn Network watches over 1,000 UK retailers and sent members 57,163 alerts in the last 30 days, because buying at retail rather than at scalped prices is what makes the numbers on your spreadsheet work at all.