Inform HMRC

Informing HMRC About Income

Starting January 1, 2024, new UK digital sales reporting legislation requires digital marketplaces like bazinga.co.uk to report users’ sales to HMRC if they exceed certain thresholds. This is similar to the reporting requirements for platforms like eBay. Here’s what you need to know:

New UK Digital Sales Reporting Requirements:

• Effective Date: The legislation comes into effect on January 1, 2024.
• Thresholds for Reporting:
  • Total sales equal to or more than €2,000 (approximately £1,740) after deducting fees and commissions or taxes.
  • 30 or more completed sales transactions in a calendar year (cancelled transactions are not included).

Reporting Process:

• Annual Reporting: Starting January 2025, the previous calendar year’s sales information will be reported to HMRC each January. A copy of the reported data will also be provided to sellers.
• New Accounts: Newly registered accounts in 2024 and all accounts in 2025 that meet the thresholds will be subject to reporting.

For more information about UK digital sales reporting, how total sales for the calendar year are calculated, and what information will be shared with HMRC, visit our Help Page.

Guidance from HMRC:

• Tax Obligations: Whether or not you need to pay tax depends on whether you are trading or making a capital gain.
  • Trading: If you buy goods for resale or make goods with the intention of selling them for a profit, you are likely trading and must pay tax on your profits.
  • Capital Gains: If you sell possessions for more than you paid for them, you may need to pay capital gains tax if you exceed your annual allowance (currently £6,000).
  • Personal Sales: Selling unwanted possessions from your home is unlikely to incur income tax unless you exceed the capital gains allowance.
  • Low Income from Trading: If your total income from trading or providing services online is less than £1,000 in any tax year (before expenses), you are not required to inform HMRC or pay tax on the profits due to the Trading and Miscellaneous Income Allowance.

For detailed guidance and examples, see the HMRC Guidance on Paying Tax for Selling Goods or Services Online.

If you have any other questions or need further assistance, please feel free to reach out to us. Happy selling on bazinga.co.uk!