HMRC explains £6,000 tax rule for selling items on eBay

HMRC has explained the tax rules that apply when selling items online. The tax body spelled out the rules after a question from an eBay seller. The person got in touch over social media as they were surprised to be asked for some of their tax details when selling some personal items on eBay.

They asked: "I'm selling some personal possessions on eBay and it's now requesting my National Insurance number. There's an allowance of £1,700 before tax.

"Does this include my main income from my employer for which my tax is automated? My old jumpers won't ever earn close enough to £1,700." New rules came in at the start of 2024, meaning digital platforms such as eBay must share their sales data and some personal information about sellers with HMRC.

This applies if you sell 30 or more items in a calendar year and if you receive around £1,700 for the sale of the items. A digital platform is any software, including mobile apps and websites, where people can offer services and goods to users.

HMRC has to request these details from sellers who the rules apply to:

• Full name
• Address where you normally live
• Date of birth
• Tax identification number (National Insurance number if you live in the UK).

Responding to the eBay seller, HMRC initially sent the person a link to the Government website with information about when you need to tell HMRC about additional income you are receiving on top of your employment income.

The webpage includes a link to a tool you can use to check if you need to tell HMRC about your extra earnings. The person said they had used the tool and it indicated they would not need to tell HMRC. The person asked: "If I add my National Insurance to eBay like it's requesting, will it push me into the next tax bracket with my employer's salary? There's a lot of misinformation online."

HMRC responded to set out another rule: "Personal possessions you sell for less than £6,000 are not subject to tax." If you sell an item for more than £6,000, you may need to pay capital gains tax. The tax rate for this would be 24 percent.

Guidance on the Government website states that personal possessions are "items that belong to you for your own use". This can include items you have bought yourself or that were given to you as a gift. Personal possessions can include clothing, jewellery or computers and mobile phones.