Understanding HMRC’s exchange of information with online marketplaces
There continues to be discussions regarding HMRC’s exchange of information with popular online marketplaces like eBay, Etsy, Vinted, and others. Many of these reports have caused confusion and concern among individuals who sell second-hand items online. In this article, we aim to provide clarity about what this exchange of information really means for sellers and how it might impact their tax obligations.
Some individuals also receive income and/or goods from being online ‘influencers’ which can also be taxable and should be declared. HMRC are adept at matching such individuals to their tax records to see if they are declaring their earnings from such activities correctly.
12th August 2025
-
Chris Watts See profile -
Heather Coley See profile
HMRC’s exchange of information with online marketplaces is part of the government’s broader efforts to combat tax evasion and ensure that all individuals and businesses pay the taxes they owe. These measures are not meant to discourage people from selling their second-hand items but to ensure that taxes are collected appropriately from those who are actively trading.
This exchange of information primarily affects individuals or businesses that use online marketplaces to sell items as a regular or primary source of income. If you occasionally sell personal items that you no longer need, such as used clothing or electronics, you are unlikely to be impacted by these measures.
Casual sellers
If you occasionally sell personal items or have a clear intention to sell personal items that you no longer need, you are generally not considered a trader or a business for tax purposes. In this case, you don’t need to register for Self-Assessment or pay Income Tax on the sales of your second-hand items.
Regular sellers
If you are actively engaged in buying and selling items with the intention of making a profit, you are considered a trader, and your income from these transactions may be subject to Income Tax. It’s important to keep accurate records of your sales, expenses, and income to comply with tax regulations.
From 1 January 2024 online marketplaces, like Etsy and eBay, have been providing HMRC with transaction data for sellers. This data includes the seller’s contact details, sales history, and payment information. HMRC will then use this information to identify individuals or businesses that may have tax obligations related to their online sales.
Just because you may have received a letter from HMRC does not mean that you have to pay tax on any sales you make. Correct representation to ensure HMRC are given evidence to demonstrate that you are not trading will help to get a case closed down quickly.
HMRC have been able to establish a number of individuals who were trading through online marketplaces and have been collecting tax from them, so it is an area they will continue to pursue for some time.
This campaign by HMRC is part of a wider series of initiatives known as ‘nudge letters’ which actively seek individuals or businesses who they believe have not declared all their taxable earnings.
If you are aware that you need to make a disclosure of income that has not previously been disclosed, then there are voluntary disclosure opportunities available. These lower the level of penalties HMRC will charge for any tax that is due, in some cases the penalty can be zero, or suspended for a period of time.
Our HMRC Enquiry team of Chris Watts and Heather Coley are experienced in assisting people with making disclosures to ensure they are treated fairly by HMRC and to make the process as stress free as possible.