If you sell on eBay, Vinted, Facebook Marketplace, or at car boot sales, you need to understand the HMRC £1,000 trading allowance. It's the difference between doing nothing and filing a tax return — and getting it wrong means penalties, not just a form to fill in.
This guide covers what the allowance is, how it applies to resellers, when you need to act, and what records you need to keep.
What is the £1,000 trading allowance?
The trading allowance is a relief introduced by HMRC in April 2017. It lets individuals earn up to £1,000 per tax year from trading or casual activities — including selling second-hand goods online or at markets — without having to pay tax on it or report it to HMRC.
The UK tax year runs from 6 April to the following 5 April.
Does eBay or Vinted reselling count as "trading"?
HMRC distinguishes between two types of selling:
Not trading (no tax due): Selling your own personal possessions that you no longer want. Your old games console, clothes you've grown out of, furniture you're replacing. Even if you happen to make more than you originally paid — perhaps because the item appreciated — this is generally not taxable income. There's no limit on how much you can make this way.
Trading (potentially taxable): Deliberately buying items with the intent to resell them for profit. If you regularly visit car boots, charity shops, or clearance sales to buy stock, and then sell it on eBay or Vinted, HMRC will likely view this as trading income.
The key test is intent. If you bought something to resell it, that's trading. The good news is the £1,000 allowance still applies.
How the allowance works in practice
Scenario 1: Gross sales of £1,000 or less
If your total gross trading income across all platforms is £1,000 or less in a tax year, you don't need to do anything. No reporting, no Self Assessment, no tax. You simply keep the money.
Scenario 2: Gross sales over £1,000
If you exceed £1,000 gross, you must register for Self Assessment and file a tax return. But you have a choice about how to calculate your taxable income:
Option A — Claim the trading allowance: Deduct £1,000 from your gross income and pay tax on the rest at your marginal income tax rate.
Example: £4,000 gross sales − £1,000 allowance = £3,000 taxable income.
Option B — Deduct your actual costs: Deduct what you actually paid for items, postage materials, platform fees, and other genuine business expenses.
Example: £4,000 gross sales − £2,800 actual costs = £1,200 taxable income.
You cannot claim both. Choose whichever produces the lower taxable income. Option A is simpler if you haven't kept good records. Option B is usually better for resellers with significant stock costs.
When you need to register for Self Assessment
You must register if your gross trading income exceeds £1,000 in a tax year.
| Deadline | What it covers |
|---|---|
| 5 October 2026 | Register for Self Assessment if trading income exceeded £1,000 in the 2025/26 tax year |
| 31 October 2026 | Deadline to file a paper tax return for 2025/26 |
| 31 January 2027 | Deadline to file online and pay any tax owed for 2025/26 |
HMRC does not send reminders. Late registration carries an automatic £100 penalty. Late filing carries further daily and percentage-based penalties. The responsibility is entirely yours.
You can register for Self Assessment at gov.uk/register-for-self-assessment.
What counts as deductible expenses for resellers
If you choose Option B (deducting actual costs), you can claim:
- Cost of goods sold — what you paid for items you've actually sold in this tax year (not items you haven't sold yet — those stay in your stock value)
- Postage and packaging — stamps, prepaid labels, bubble wrap, boxes, poly bags, tape
- Platform fees — eBay final value fees, promoted listing fees, Vinted seller fees (if applicable), PayPal fees on older sales
- Subscriptions — tools you use specifically for your reselling business, such as eBay shop subscriptions, listing tools, or software like FlipIQ
- Mileage — trips to car boots, charity shops, post offices, or collection points. HMRC's approved mileage rate for cars is 45p per mile for the first 10,000 miles per tax year. Keep a mileage log.
- Home office — if you use a specific area of your home exclusively for business purposes (pro-rata based on size and usage)
You cannot deduct: personal spending, cost of items you haven't sold yet, or the personal portion of anything with dual use.
Combining eBay and Vinted income
This is the mistake that catches many resellers out. Your £1,000 threshold applies to your total trading income across all platforms combined — not per platform.
If you earn £600 on eBay and £600 on Vinted in a tax year, your gross trading income is £1,200. You're over the threshold and need to register for Self Assessment — even though neither platform individually exceeded £1,000.
Both platforms also report sales data to HMRC. Since 2024, HMRC has required digital platforms to report seller data, which is shared with tax authorities across the EU and UK under international agreements. HMRC can and does cross-reference this data.
Record keeping — what HMRC expects
If you file Self Assessment, HMRC requires you to keep records for at least 5 years after the filing deadline for the relevant tax year. For 2025/26 (filed by 31 January 2027), keep records until at least 31 January 2032.
For resellers, keep:
- A record of every item you purchased: date, source (car boot, charity shop, wholesale), price paid
- A record of every sale: date, platform, sale price, fees charged, buyer reference if possible
- Receipts, bank statements, or payment records to back up every figure
- A mileage log if you're claiming travel costs (date, destination, purpose, miles)
- Screenshots or exports of your eBay and Vinted sales history
A spreadsheet works fine. FlipIQ automatically tracks what you paid for each item, what it sold for, and calculates your profit per item and monthly totals — which is useful both for running your business and for putting together your tax return.
Common mistakes UK resellers make
Thinking the threshold is about profit, not revenue. It's based on gross income. If buyers pay you £1,200 in total and you spent £900 buying stock, your gross income is still £1,200 — over the threshold — even though your profit was only £300.
Treating unsold stock as a cost. You can only deduct the cost of items you've actually sold in the tax year. If you bought 60 items but sold 40, you deduct the cost of 40. The other 20 remain in your stock value and will be deducted when you eventually sell them.
Ignoring Vinted income. Vinted has grown substantially. If you're selling on both platforms, add the totals together before deciding whether you're over the threshold.
Assuming HMRC won't notice. Since 2024, digital platforms are required to report seller data to HMRC annually. If your reported sales don't match your tax return, you will hear about it.
What to do right now
If you think you might be over the £1,000 threshold for the current or previous tax year:
- Export your eBay and Vinted sales history and add up your gross receipts
- If you're over £1,000, register for Self Assessment at gov.uk before the October deadline
- Gather your purchase receipts, postage costs, and fee records
- Decide whether to claim the £1,000 allowance or deduct actual costs
- File your return and pay any tax owed by 31 January
If you're under the threshold, keep selling and keep records in case your income grows. Once you cross £1,000 in any tax year, the clock starts ticking on the registration deadline.