So you’re selling on Vinted and you’re starting to make decent income – but what does that mean for your taxes? Vinted is required to share sellers’ information with HMRC, so it’s important to make sure which Vinted tax rules apply to you.
Do you have to pay tax on Vinted?
Yes, you do have to pay tax on income you earn from Vinted. However, not all sales count towards taxable income on Vinted as selling your personal items (such as unwanted clothes) is not taxed. This means that usually only Vinted business sellers trading for profit will have to pay tax.
You won’t have to pay tax on Vinted if:
- you’re selling items for less than you paid for them
- the price of a single item doesn’t exceed £6,000
- your yearly profit is less than £3,000
So if you’re selling unwanted items from around your home, you likely won’t have to pay tax on your Vinted sales. But if you’re buying items specifically to sell on Vinted in order to make a profit, you’d be considered an online trader, and will need to pay tax if you meet certain thresholds.
Vinted will contact any sellers who may need to pay tax. You’ll hear from Vinted if you’ve:
- completed over 30 sales within the calendar year
- sold more than £1,700 within the calendar year
Even if you meet one of these criteria and Vinted contacts you, it still doesn’t mean you have to pay tax, so make sure you check HMRC’s requirements carefully.
Read more: How to sell on Vinted – everything you need to know
How much can you earn on Vinted before paying tax?
If you fall outside of the above criteria, you may need to pay tax on your Vinted sales. If so, there are two key figures you need to remember here.
However, it’s important to note that these figures are the same for all of your self-employed income streams. This means that if you sell through Vinted and another platform (such as Etsy or Depop), these all count under the same threshold, not individually.
Tax-free trading allowance
The tax-free trading allowance is currently set at £1,000 each tax year. This means that you won’t have to pay tax on any self-employment income under this amount.
Self Assessment reporting threshold
The second is the Self Assessment reporting threshold. This is currently also £1,000 but is set to increase to £3,000 by 2029.
When this threshold rises, if you earn between £1,000 and £3,000, you’ll only have to complete an income declaration via a simple online form – rather than a full Self Assessment. Until then, you’ll need to complete a Self Assessment, which we’ll go over more below.
Capital gains tax
If the price of any single item you sell is more than £6,000, you may need to pay capital gains tax on it.
Will Vinted report my earnings to HMRC?
As of January 2024, HMRC requires popular side hustle platforms (such as Vinted) to report how much money users are making. This means that, if the above criteria applies to you, it’s important you make an income declaration to HMRC.
HMRC has launched an online tool for Vinted users to check if they need to declare their income. If the tool believes you need to pay tax, you’ll have to submit a Self Assessment tax return.
You can keep up to date with the latest changes to side hustle tax reporting in our guide.
How do I pay Vinted tax?
If you’re earning more than £1,000 from either Vinted (or Vinted and other income streams), then you’ll need to register for Self Assessment by 5 October. You’ll then need to submit an annual Self Assessment tax return by 31 January each year.
You’ll be responsible for paying both income tax and National Insurance contributions – but remember you won’t pay any income tax on earnings below £12,570 as this is your personal allowance.
You’ll even be able to claim certain allowable expenses on your Vinted tax – such as Vinted platform fees and postage and packing costs.
Because you’ll be completing a Self Assessment for your Vinted tax, you’ll need to keep accurate records of your Vinted income. Make sure you keep track of your:
- sales receipts
- proof of postage and packaging costs
- expense receipts
- bank statements
Remember you’ll need to keep these records for at least five years after the Self Assessment deadline in case HMRC needs to audit your records.
Most Vinted sellers won’t need to pay VAT – as the VAT registration threshold is currently £85,000.
What happens if I don’t pay tax on my Vinted sales?
If you earn over the threshold to pay Vinted tax and don’t, you may receive a penalty from HMRC. This can be up to 100 per cent of the tax owed.
And since HMRC requires online platforms such as Vinted to report their users’ income, it’s important to comply.
Remember, this article is just a guide, and it’s always worth seeking professional legal advice.
More guides for Vinted sellers
- 8 best apps for selling clothes online
- How to start an online shop – the ultimate guide to selling online
- Product photography for small businesses – how to take better photos
- Can HMRC check your bank account without your permission?
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