eBay Seller Side Hustle Tax UK 2026/27: When You Actually Owe Tax
How UK tax rules apply to eBay and other online marketplace selling in 2026/27 — the trading allowance, when you must register, and a worked example.
The key question: are you trading?
The first question for any eBay seller is not how much you're earning, but why you're selling. Clearing out your loft, wardrobe or garage and selling items you originally bought for personal use is not trading, and any proceeds are not taxable regardless of the amount. But if you are buying items specifically to resell, making items to sell, or running what is functionally a small retail operation, HMRC treats that as trading income.
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Open Self-Employed Tax calculatorThe £1,000 trading allowance
Anyone with genuine trading income, including online marketplace selling, can earn up to £1,000 a year before needing to register for Self Assessment or pay any tax on it. This is a full allowance, not a threshold that triggers tax on the whole amount once crossed — trading income between £1,000 and higher amounts is taxed on the profit above what expenses would otherwise cover, and sellers can choose whichever calculation method (the £1,000 allowance or actual expenses) gives the better result.
Marketplace reporting to HMRC
Since January 2024, digital platforms operating in the UK, including eBay, Vinted, Etsy, Depop and Airbnb, are required under international rules to collect and report seller information to HMRC, particularly once a seller passes certain transaction or income thresholds on the platform. This does not create new tax owed for casual sellers clearing out personal items, but it does mean HMRC has significantly more visibility into who is running a genuine reselling operation than in the past.
Worked example: £8,000 trading profit as sole income
If eBay reselling profit of £8,000 is someone's only income for the year, the £12,570 personal allowance covers it entirely, meaning no Income Tax is due, though registration for Self Assessment is still generally required once the £1,000 trading allowance threshold is exceeded. If this profit sits on top of an existing employed salary, it is added to total income and taxed at the marginal rate that applies above the combined personal allowance and any other income already using it up.
Bottom line
Casual personal-item selling on eBay is not taxable, but regular reselling for profit is trading income, taxable once it exceeds the £1,000 trading allowance and generally requiring Self Assessment registration. With marketplaces now reporting seller data directly to HMRC, keeping accurate records of what was paid for stock and what it sold for has become more important than ever.
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Frequently asked questions
Do I have to pay tax on things I sell on eBay?
It depends on why you're selling. Simply selling your own unwanted personal possessions occasionally is not trading and is not taxable. If you are regularly buying stock, or making items, specifically to resell for profit, that activity counts as trading and is taxable.
What is the trading allowance and how does it help eBay sellers?
The trading allowance lets you earn up to £1,000 a year from trading activity, including online selling, without needing to register for Self Assessment or pay tax on it, provided that is genuinely trading income rather than proceeds from selling personal items.
Do online marketplaces report seller data to HMRC now?
Yes — since January 2024, digital platforms including eBay, Vinted, Etsy and Depop are required to report seller information to HMRC under new international reporting rules, particularly for sellers who exceed certain transaction thresholds, making it easier for HMRC to identify undeclared trading income.
How much tax would an eBay reseller with £8,000 profit pay in 2026/27?
If this is your only income, the £12,570 personal allowance covers it entirely, so no Income Tax would be due. If you also have other income, such as an employed salary, the £8,000 profit would be added to your total income and taxed at your marginal rate above the personal allowance and trading allowance.
Do I need to register as self-employed if I'm reselling on eBay for profit?
Yes, once your trading income (before expenses) exceeds the £1,000 trading allowance in a tax year, you generally need to register for Self Assessment and declare the profit, even if the actual tax owed turns out to be small or nil.
Can I deduct the cost of items I bought to resell?
Yes — if you are trading, you deduct what you paid for stock, plus postage, packaging, eBay and PayPal fees and any other genuine business costs, from your sales revenue to arrive at taxable profit, rather than being taxed on the full sale price.
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