Reminder: No Change to Tax Rules for Selling Personal Items on Online Marketplaces
26 September 2024
Selling your used clothes or old furniture online? No need to worry about HMRC!
With the rise of online marketplaces, many people are taking the opportunity to sell unwanted personal items, such as used clothes or old furniture. Recently, there have been some rumors circulating that HMRC is cracking down on people who sell in this way, potentially classifying these sales as a side hustle.
However, we want to remind everyone that there has been no change in the tax rules for selling your personal possessions.
Key Points to Remember:
- Selling personal items like used clothes, old furniture, or household goods does not constitute a business activity. HMRC does not tax individuals on the sale of personal items as long as they are not sold with the intent to make a profit or operate as a business.
- HMRC is not classifying casual sellers as "side hustlers". If you’re simply getting rid of unwanted items, you don’t need to worry about being taxed on these transactions.
- Business vs. Personal Sales: The distinction lies in whether you are trading goods regularly with the aim of making a profit. If you’re selling your possessions to declutter or for other personal reasons, this is not considered a business, and no tax is due.
What Does Count as a Business?
If you’re buying items specifically to sell them for a profit, running a store, or regularly selling in bulk on online platforms, then you may be classed as trading. In this case, income from these activities may be taxable, and it’s important to keep accurate records.
But for most people just looking to sell their old clothes or used furniture, there’s no need to worry. HMRC is not clamping down on casual sellers, and you won’t be taxed on sales of personal possessions.
Stay informed and make sure you understand the rules—but rest assured, nothing has changed when it comes to selling your own personal items online.
If you're a sole trader or landlord earning over £50,000 a year, big changes are coming your way. From April 2026, you'll need to comply with Making Tax Digital for Income Tax (MTD for ITSA) and while that might sound like it's a long way off, it’s closer than it seems. At Books and Business, we work closely with those in the trades and construction sector, and we know that admin is rarely top of the to-do list when you're running jobs, managing quotes, and keeping customers happy. But this change will affect how you keep records and report your income, so starting early is key. What’s Changing? Under MTD, if your income is over £50,000, you’ll need to: Keep digital records Submit quarterly updates to HMRC using MTD-compatible software File a final year-end statement alongside your usual return And that’s just the start, the income threshold will drop to £30,000 in April 2027, meaning even more sole traders will be brought into the fold. How does this affect you? Let’s be honest, this adds another layer to the already time-consuming admin. If you’re currently filing a Self Assessment once a year, you'll now be reporting four times a year plus a final return. That’s a big shift, especially if you’re used to doing things manually or handing it all over once a year. But there’s a silver lining: the right digital tools (and a good bookkeeper) can make the transition much smoother and even help you work more efficiently. Our advice to get ahead Go Digital Sooner Rather Than Later! Start using digital invoicing, receipt capture apps, and MTD-compatible software now. It’ll help reduce errors, save time, and improve your cash flow. Don’t go it alone We’re already helping trades and construction clients get ready for MTD, from choosing the right software to setting up processes that work for them. You don’t need to become a tax expert overnight as we’ve got you covered. Stay informed HMRC is releasing more details as the deadline approaches, and we’ll keep you updated with the important bits. Bottom line MTD is coming and it’s not going away. But getting ready doesn’t have to be stressful or expensive. We’re here to help you prepare in a way that fits around your business, saves you time, and avoids any last-minute scrambles. Want to know if your current setup is MTD-ready? Give us a call, we can help streamline your processes. Get in touch today and let’s get ahead of the change.
Making Tax Digital for Income Tax Self-Assessment (MTD ITSA) is coming, now is the time to get prepared! Whether you're a sole trader, subcontractor, or running a small limited company, choosing the right accounting software will keep you compliant and help you stay in control of your finances. But with so many options out there, how do you choose the best MTD software for your business? Here are some key features to look for: HMRC Compatibility The most important feature is that the software you choose is MTD compliant. It should link directly with HMRC so you can send updates digitally as well as meet other MTD obligations. Ease of Use Your time is best spent on-site, not buried in admin. Choose software that’s straightforward and suits your level of accounting knowledge. Look for mobile apps and dashboards that give you access on the go. Automation & Reporting The best systems will save you time by automating recurring tasks, like invoicing, expense tracking, and mileage logs as well as offering clear reports to help you understand where your money's going. Pricing & Scalability Think about where your business is headed. Can the software grow with you? Choose a platform that fits your budget now, but also supports features like payroll, CIS returns, or multiple users down the line. What are the most popular software options: QuickBooks – A popular option for trades and small business owners, offering strong mobile tools and CIS features. Xero – Great for real-time visibility, simple bank feeds, and job costing add-ons. FreeAgent – Perfect for sole traders and subcontractors, especially those who like things kept simple. Sage – Well-established and ideal if you’re looking for a more traditional setup with solid support. You’ve chosen the software but why make the switch now If you’re still using spreadsheets or a paper-based system, we cannot stress enough that now is the time to go digital . Getting ahead of the MTD deadlines gives you time to learn the software, avoid penalties, and work out any teething problems before submissions are mandatory. A quick note to be aware ...... some banks now include accounting software when you open a new business account. However, it’s advisable to do your research first to ensure the software they are offering meets your business needs. We can help with your MTD journey; we offer a variety of packages to suit each individual’s needs, from basic set up to regular training or just ad hoc training on any areas you may be getting stuck with, we also offer full packages where we can do it all for you. Get in touch for more information.
With the 1st April deadline looming, its reported that 550,000 homebuyers are racing to complete purchases before stamp duty jumps back to its 2022 levels. We have read that sales awaiting completion are up 25% from last year, with an average five-month wait putting pressure on buyers to beat the deadline. Currently, first-time buyers pay no stamp duty on homes up to £425,000 when purchasing a property worth up to £625,000, but from 1 st April, that drops to £300,000. The upper limit will also fall from £625,000 to £500,000. It's not just the first-time buyers taking a hit, currently stamp duty is only owed on amounts over £250,000, however from 1 st April, only the first £125,000 will be exempt. Despite the cost increase, it looks like most buyers are still pressing ahead, with some even renegotiating offers to offset the hike. According to our research, regardless of the impending cost increases, property experts such as Rightmove are predicting the demand to stay strong; especially if interest rates continue to fall. With mortgage rates already dipping below 4%, we believe buyers remain hopeful for a more affordable market ahead.
