THOUSANDS of Vinted users who have made sales this year are being reminded of an upcoming October tax deadline.
Since January 1, users on digital platforms including Vinted have had to submit a form if they make a profit through the website.
Vinted users are being reminded of an upcoming tax deadline[/caption]
Firms now have to pass on customer data to HMRC if they sell 30 or more items a year or earn over £1,700.
This is known as a HMRC seller report form.
This is because anyone selling items online might have to pay tax if they earn £1,000 or more.
If the money a member makes on online marketplaces over a year is less than the amount they paid for the items they are selling, then there is no tax to pay.
But those trading for profit might need to pay tax.
The new rules introduced at the beginning of January mean marketplaces must now pass on seller’s earnings directly to HMRC.
It is part of a wider tax crackdown to help ensure that those who boost their income via side hustles pay up what they owe.
It is worth noting that this isn’t a new tax.
Those who earn over £1,000 have always had to declare income and fill in a self-assessment tax return, but it gives the taxman greater visibility over what you earn.
The reminder about the form comes as new sellers have just one week to go to see if they need to register for a Self Assessment tax return.
The tax return is used by the HMRC to collect income tax.
The deadline for new sellers to check if they need to submit a Self Assessment is October 5.
But the actual deadline to submit the form is January 31 if your file online or October 31 if you file via post.
Do I have to pay tax on my second-hand sales?
Around 18million people across the UK use Vinted to buy and sell clothes and other items online.
However, if you start earning more than a certain amount you have to pay tax.
A Vinted spokesperson told The Sun: “If you sell an item for less than you bought it for, then there’s no tax to pay because you’ve made no profit from selling it.”
For example, if you bought a shirt for £30 and sold it for £29 – you’ve made no profit, so there is no tax to pay.
Even if you do make a profit, you still won’t have to pay any tax on it unless you sell that item for £6,000 or more.
How does Vinted work?
VINTED is an app where you can buy and sell second-hand clothes and accessories.
Sellers can list items on the app for free and there are no fees for selling items either.
Instead, buyers pay a buyer protection fee on every transaction, worth between 3% and 8% of the sale price before postage, plus 30p to 80p depending on the item’s value.
This fee contributes towards protecting buyers if they have a problem with their order.
Any money you earn as a seller goes into your Vinted Wallet, which you can then withdraw out to your bank account as cash.
Even then, members can use a Capital Gains tax-free allowance, which is £3,000 for all yearly profits.
Vinted added: “Generally, only business sellers trading for profit might need to pay tax and provide proof of their transactions.
“This includes sellers who buy items to resell at a higher price than they were purchased for.”
Submitting an HMRC seller form
If you have made 30 sales or £1,700 this year you will be contacted by Vinted and asked to submit the seller report form on the app.
This year, the company said it will only approach new sellers who registered in 2024.
If you do not hear from Vinted then you don’t need to do anything.
However, members who meet the criteria will be asked to add their National Insurance Number to a pre-filled form and check the details are correct before submitting it.
You don’t need to calculate or count anything yourself.
Some members may be asked to submit a Self-Assessment tax return if they earn over £6,000 in profit.
The process is separate to the HMRC reporting requirement, and members are responsible for handling this themselves.
You can check your tax status by visiting the taxpayer centre on the Vinted app or website.
How do you know if you have to submit a tax return?
Self-assessment is a system HMRC uses to collect income tax.
Tax is usually deducted automatically from wages, pensions and savings, but people and businesses with other incomes must report it in a tax return.
This applies to the following:
- Your income from self-employment was more than £1,000
- Earned more than £2,500 from renting out property
- You or your partner received high-income child benefits and either of you had an annual income of more than £50,000
- Received more than £2,500 in other untaxed income, for example from tips or commission
- Are limited company directors
- Are shareholders
- Are employees claiming expenses over £2,500
- Have an annual income over £100,000
Before you submit your tax return, you’ll need to have a unique taxpayer reference code (UTR) and activation code from the HMRC.
You get a UTR when you register for a Self Assessment return or set up a limited company.
It’s a 10-digit number and it might just be called a tax reference.
You’ll get your UTR by post 15 days after you register but this may take longer if you live overseas.
You can file a Self-Assessment tax return online via the GOV.UK website or by post.
If you file by post the deadline is October 31 2024.
However, if you file online you have up to January 31, 2025.
Check out our step-by-step guide on filling a tax return here.
