Resale platforms, such as eBay, Vinted, Depop, and Etsy, have been mandated to disclose seller information to the UK tax authorities as part of the introduction of new tax disclosure regulations known as the “side hustle tax.” These rules apply to online sellers who make more than £1,000 a year through online transactions, covering a wide range of sellers in various categories, including second-hand clothing and furnishings.

The purpose of these regulations is to combat tax evasion and support the government’s endeavors in this area. HM Revenue and Customs (HMRC) already has the authority to obtain information from UK-based platforms concerning sellers’ income. However, under these new rules, HMRC will be able to share data with tax authorities in other countries to gain access to information from platforms outside the UK.

According to a spokesperson from HMRC, these regulations aim to assist online sellers in accurately reporting and paying their taxes. They will also help identify any deliberate non-compliance, ensuring fairness for all taxpayers.

Contrary to certain sensationalist media reports, businesses will not be obligated to share data about sellers who conduct less than 30 transactions annually, equivalent to earning less than £1,740 per year. Furthermore, there are exceptions that low-level sellers need not be concerned about. For instance, individuals who sell their items for less than they purchased them for or sell gifted items are exempt from these rules.

The UK government is clearly taking proactive measures to address tax evasion within the digital resale sector. By mandating platforms to disclose seller data, tax authorities can effectively enforce compliance and ensure that everyone contributes their fair share. This action will not only foster a fair tax system but also create a level playing field for all sellers in the online marketplace.

Useful Links:
1. gov.uk – Tax Compliance Data from Online Sellers
2. theguardian.com – Changes to UK Online Tax Exemption Rules and Property Rental