Londoners clearing out their wardrobes on popular selling app Vinted are being urged to check their earnings, as many may unknowingly be liable for tax on their sales. An estimated £2 billion was spent on second-hand Christmas gifts last winter, fuelling a boom for platforms like Vinted, but the taxman is now paying close attention.
The £1,000 Tax-Free Threshold
Current UK rules state that anyone earning over £1,000 in a single tax year from self-employed work, freelance projects, or side hustles must register with HM Revenue & Customs (HMRC). This includes income generated from selling items on apps like Vinted. Sellers exceeding this limit are required to submit a self-assessment tax return.
"The £1,000 threshold sounds high at first, but it’s just £84 a month – which is easy to exceed without realising," warned Mike Parkes, Technical Director at financial management firm GoSimpleTax. With the app downloaded over 32.8 million times in 2023 alone, and Google searches for 'Vinted pros' rising by 50% in the past year, a significant number of users are now treating it as a legitimate income stream.
Seller Details Shared with HMRC
Vinted now requires sellers to enter their National Insurance Number and personal details to continue using the platform. The app states this is "for the UK to know about business sellers on online marketplaces," while maintaining that selling personal items is generally not taxed. However, this changes once the £1,000 earnings cap is breached.
London-based seller Tilly C, who uses the app for extra pocket money, expressed surprise at the limit. "I sell a lot of things from a £1 top to a £75 pair of boots... I do think £1,000 is a lot if you’re someone who is also just selling things out of your wardrobe," she said. She added that those making a significant income are likely running a business and should expect standard business tax rules to apply.
The Wider Impact of the Second-Hand Boom
The trend towards second-hand shopping is driven by multiple factors. London Vinted user Will F pointed to increased environmental consciousness and economic pressures. "People seem more inclined to buy things online, especially since the Covid pandemic and with the economy being in worse shape in this country," he noted.
However, this shift has consequences for the high street. Tilly C observed, "High street brands are closing all over the country, and with more online shopping and second-hand gift buying, I think this will also rise this year." She argued that while online selling is accessible and cheaper, consumers facing a cost-of-living crisis can't be solely blamed for the change.
With two in five Brits estimated to have a side hustle averaging £11,000 in value—spanning reselling, crypto, and influencing—understanding tax obligations is crucial. Vinted advises that providing seller information does not automatically create a tax bill, and they will contact users who exceed the threshold. Experts recommend all sellers keep clear records of their earnings to navigate the rules safely.
