As part of its latest one-to-many campaign, HMRC has identified a number of individuals who have failed to declare income received from online marketplace sales in tax years up to and including the year ended on 5 April 2023.  

The letter explains that an individual who buys or makes goods to sell at a profit is likely to be trading. Income tax may be payable on any profits from the trade depending on the circumstances. For example, no tax will be due where total sales are less than the £1,000 trading allowance or where the person’s total taxable income is within their personal allowance for the year.  

HMRC says that capital gains tax (CGT) may be due on the sale of personal items depending on the nature of the items and how much they were sold for.  There may be no liability to CGT where the item is a chattel and the amount received for it was £6,000 or less. There is also the person’s tax-free annual exemption amount to consider. This was £12,300 for 2020/21 to 2022/23, £6,000 for 2023/24 and is £3,000 for 2024/25.  

In the letter, HMRC reassures people who are simply selling unwanted personal belongings from their wardrobe or garage that they usually don’t have to worry about tax.  

Where the person has income to declare, they should follow the instructions on gov.uk or call HMRC using the number given in the letter. If they don’t have income to declare, they should contact HMRC by phone or email using the details provided. In both cases, the letter says they should take action within 30 days of the date of the letter or HMRC will open a compliance check. This may affect the amount of any penalties charged.   

HMRC’s ‘side hustles’ campaign 

HMRC has launched a new campaign: Side hustles, extra earnings and working for yourself: get help with your hustle - Tax Help for Hustles.  

It covers the following areas to help people understand their tax obligations: 

• buying or making things to sell;
• side gig;
• work for myself doing multiple jobs;
• content creator or influencer; and
• rent out property. 

Further information 

• Template letter