HMRC issues warning for anyone who has 'occasionally' sold an item

HMRC has issued a warning to anybody who has "occasionally" sold an item for profit. If you have additional income, for example by selling things online or renting out part of your home, taxpayers and UK households must check whether they owe HMRC.

You might need to do a tax return if you have earned more than £1,000 through a side-hustle, are a self-employed delivery driver/rider or rent out a property, HMRC says, as well as if you create online content on the internet for followers and subscribers.

Angela MacDonald, HMRC’s deputy chief executive officer, said: “We cannot be clearer — if you are not trading and just occasionally sell unwanted items online — there is no tax due.” It comes after Dawn Register, a tax dispute resolution partner at accountancy firm BDO, told the FT there has been “a great deal of confusion around when and how people need to pay tax on extra income or gains earned through side hustles such as selling goods online or earning money through social media content”.

READ MORE Octopus issues £900 warning to anyone who is a customer with them

John Hood, a tax dispute resolution specialist for accountancy firm Moore Kingston Smith, said: "HMRC has striven to make clear that it is not interested in people selling unwanted Christmas gifts but in professional online traders who have not reported their profits.

"There are some basic tests to check if this is a hobby or a trade with the most important one being whether the person is selling goods or services with a view to making a profit." He added: "People should remember that it is not too late to register for self-assessment and complete a tax return by the end of January."

Andy Wood, an adviser at Tax Natives, an advisory firm, added: “The £1,700 or 30-item threshold is simply the point where platforms report your sales data to HMRC. It doesn’t automatically mean you owe tax or need to fill out a tax return, but it’s a great reminder to check if what you’re doing counts as taxable income.”

Fiona Fernie, a partner at accountancy firm Blick Rothenberg, said: "HMRC will compare the reports they receive with their self-assessment records to determine if online sellers have paid the correct amount of tax on the income or gains received.

“A failure to register (for self-assessment) can result in penalties of between 20 per cent and 70 per cent of the tax due where HMRC judges the behaviour to have been "deliberate but not concealed" plus significant interest charges where tax is paid late.”