CASH OUT
Warning for thousands of taxpayers ahead of HMRC deadline in DAYS including Vinted and eBay sellers – should you act?
Those who miss tax deadline could be left facing a heft fine
THE deadline for filing paper tax returns is just days away - and missing it could lead to a £100 fine.
Although many people choose to file their tax return online, which has a later deadline, the deadline to send a paper return is this Thursday, October 31.
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And there are some instances when you cannot file online, for example if you need to fill in the "foreign income and gains" or the "trust and estate" pages, as these can only be done on the paper form.
Anyone who is self-employed needs to fill in a tax return, but even if you have a full-time job, you might need to do one, such as if you have a side hustle, sell stuff online, or earn over £50,000 and you or your partner gets Child Benefit.
You’ll also need to fill in a tax return if you earn over £150,000 or if you earn more in savings interest or investment dividends than your allowance.
In particular, online sellers on platforms such as eBay and Vinted have been warned that they may need to fill in a tax return.
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If you regularly sell goods or services through an online marketplace like Vinted, this could be treated as a "trade" for UK tax purposes and you may have to pay tax on your profits.
And from January this year, the platforms must alert HMRC if you make more than 30 transactions a year or earn more than £1,700. They will let the taxman know how much you earned.
The rules around paying tax haven’t changed, but these reporting requirements have.
When you might need to file a tax return - and when you won't
If you’re just selling old stuff as part of a de-clutter, you won’t need to self-assess, but if you’re regularly selling to make a profit, or if you’re making things to sell, then you need to.
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For instance, HMRC provides the following examples to show who does – and does not – need to pay the tax:
Examples of where people are unlikely to be trading:
- Sally clears out her attic and decides to sell her unwanted items online. This is a one-off activity for Sally, and the items sold are for less or the same as the original purchase price. As these are her personal possessions she is unlikely to be trading.
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Examples of where people are likely to be trading, and the profits would be taxable:
- After making some money from selling unwanted clothes, Josh begins to buy items from car boot sales and charity shops which he then sells through online marketplaces, aiming to sell for more than he paid for them. Josh does this activity consistently, honing his skills of picking up items which he hopes to sell for a profit after fees and postage.
- Gina works full time, and in her spare time she makes greetings cards for her family and friends. Gina then begins to sell her cards online, and is soon making a profit. With business going well, she also expands the range of items that she sells. Gina is selling with the intention of making a profit, and she is also organising her activities in a way which commercially-minded traders would do.
- David collects model cars. He sometimes buys and sells them but also looks for swaps. The swaps are designed to complete sets which David knows will be more valuable as a set than as individuals. When he has a complete set, he offers it for sale, often at a sizeable profit. As David is buying and selling models so he can make a profit, he is likely to be classified as trading.
- Steve imports cameras and accessories online from the Far East and he sells them online making a profit. Steve is selling with the intention to make a profit, and he sells regularly, so he is likely to be classified as trading.
- Avram is studying part time and working in a shop on the days he is not studying. In the evenings he offers language tuition online in exchange for money. He carries out these activities frequently and has several students who are signed up to his regular classes upon which he offers a discount for bulk bookings. The activity is organised, and Avram promotes his service through word of mouth.
If you’re not sure whether your activity counts, you can check if you need to fill in a return using this
One thing worth remembering is that if you earn less than £1,000 in a tax year from your side hustle, you don’t need to file a tax return.
If you do need to do a return for the first time, you should have let HMRC know by October 5. If you haven’t already you must do it as soon as possible. You can
The next job is to fill in your assessment return. You can do this yourself or pay an accountant to do it for you.
The deadline for paper returns is October 31, but for sending one online it is January 31 2025.
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If you need a paper copy, call HMRC on 03000 200 3610 and request an SA100 form.
You need to pay the tax you owe by midnight on January 31 each year or you will be fined.
Who needs to fill out a self-assessment tax return?
YOU'LL need to submit a tax return if any of the following applied to you in the 2022/2023 tax year:
- You were self-employed and your income was more than £1,000
- You had multiple sources of income over £1,000
- You earned £10,000 or more before tax from savings, investments, shares or dividends
- You claimed Child Benefit when you or your partner earned more than £50,000 a year.
- You earned more than £2,500 from renting out property, or from other untaxed income, such as tips or commission
- You earned more than £100,000 in taxable income
- You earned income from abroad or lived abroad and had a UK income
- You need to pay capital gains tax
- You received income from a trust
- Your state pension was more than your personal allowance and was your only source of income (unless you started getting your pension on or after 6 April 2016)
- HMRC has told you that you didn't pay enough tax last year (and you haven't already paid up through your tax code or via voluntary payments)
- You filed a self-assessment tax return for the 2021/22 tax year (even if you didn't owe any tax)
- You were self-employed and earning less than £1,000 but you still want to pay 'class 2' national insurance contributions voluntarily to protect your entitlement to the state pension and certain benefits
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