Written by the TaxTune Editorial Team·Reviewed by our qualified accountants·Updated June 2026

Selling personal items versus trading

There is an important difference between selling your own used belongings and trading. If you sell personal items you already owned, such as old clothes, a used phone or unwanted gifts, that is not usually taxable, even if you make a tidy sum across the year. You are simply disposing of your own things.

Trading is different. If you buy or make goods with the aim of selling them at a profit, or you sell often and in an organised way, HMRC is likely to treat that as a business. Buying job lots to resell, making crafts to sell on Etsy, or flipping items for profit all point towards trading. Once you are trading, the profit is taxable.

How HMRC decides if you are trading

HMRC looks at the whole picture rather than a single rule. Helpful questions to ask yourself include whether you bought the items in order to sell them, how often you sell, whether you repair or improve goods to increase their value, and whether you sell in an organised and repeated way. The more of these that apply, the more likely it is that you are trading.

If you are genuinely just clearing out personal items, you do not need to worry about income tax on those sales. If you cross into trading, you should declare your profit. If you are unsure which side of the line you sit on, our accountants for online sellers can review your activity and give you a clear answer.

The trading allowance

If you do have trading income, the trading allowance lets you earn up to £1,000 of gross trading income in a tax year without paying tax on it or needing to report it. This is a useful shelter for small side sales on Vinted, eBay or Etsy.

Two points matter here. The allowance applies to your gross income before costs, not your profit. And if your trading income goes over £1,000, you usually need to register for Self Assessment and report it. You can then either claim the £1,000 allowance instead of your actual costs, or deduct your real costs, whichever gives the better result.

A worked example

Worked example

A Vinted seller deciding if they are trading

Megan starts by selling her own old clothes on Vinted and makes around £700 over the year. Because these are her personal belongings, there is no tax to pay and nothing to report. A few months later she begins buying bundles of clothing cheaply to clean up and resell at a profit. This is now trading. Her gross sales from the resold bundles reach £3,200 in the tax year, so she registers for Self Assessment. She compares claiming the £1,000 trading allowance against her actual costs of stock and postage, and uses whichever leaves her with the lower taxable profit.

Costs you can claim once you are trading

If you are trading and your income is above the trading allowance, you can deduct the genuine costs of your business instead of the £1,000 allowance. For online sellers these typically include the cost of stock, postage and packaging, and the platform and payment fees charged by sites such as eBay and Etsy.

  • Cost of goods bought or materials used
  • Postage, packaging and delivery
  • Platform selling fees
  • Payment processing fees

Our guide to expenses for online sellers explains the full list. Keeping these records also makes it easy to see whether your side hustle is actually profitable once fees are taken out.

Platform reporting to HMRC

Online marketplaces now report seller data to HMRC under digital platform rules. Sites such as eBay, Vinted and Etsy pass on information about sellers who pass certain activity levels, including details of sales. This does not change the underlying tax rules, but it does mean HMRC can see your activity.

If you are simply selling personal items, there is nothing to fear from this reporting. If you are trading, it is a strong reason to keep clean records and report your profit correctly. Tidy bookkeeping means the figures you declare match the data the platforms send, with no awkward queries.

What you should do

Decide honestly whether you are selling personal items or trading. If you are trading, keep a record of your sales and costs, watch the £1,000 trading allowance, and register for Self Assessment if you go over it. If your selling is growing into a real business, get proper advice early.

Not sure whether you have crossed the line into trading? start your quote and we will review your sales and tell you exactly what you need to do.

In short

When selling on eBay, Vinted and Etsy counts as trading, how the trading allowance works and what the platforms report to HMRC.

Frequently asked questions

Do I pay tax on selling my old clothes on Vinted?
No. Selling your own used personal items, such as old clothes, is not usually taxable, even if the total is significant. It only becomes taxable if you are trading, meaning you buy or make goods to sell at a profit in an organised way.
What is the trading allowance?
The trading allowance lets you earn up to £1,000 of gross trading income in a tax year without paying tax on it or reporting it. It applies to income before costs. If your trading income goes over £1,000, you usually need to register for Self Assessment.
How does HMRC decide if I am trading?
HMRC looks at the whole picture, including whether you bought items to sell them, how often you sell, whether you improve goods to add value, and how organised your selling is. The more of these that apply, the more likely you are trading.
Do eBay, Vinted and Etsy report my sales to HMRC?
Yes. Under digital platform rules these sites report seller data to HMRC for sellers who pass certain activity levels. If you only sell personal items there is nothing to worry about. If you are trading, keep records so your declared figures match.
Can I deduct my eBay and Etsy fees?
Yes, if you are trading and not using the £1,000 trading allowance. Platform selling fees, payment processing fees, the cost of stock and postage are all allowable costs you can deduct from your sales before working out taxable profit.
When do I need to register for Self Assessment as a seller?
You usually need to register if your gross trading income is more than £1,000 in a tax year. Selling personal belongings does not count. If you are unsure whether your activity is trading, it is worth getting advice before the deadline.