You generally don't pay income tax on selling your own used personal items for less than you bought them for, but you might have to pay tax if you're "trading" (buying to resell for profit), have high profits over the £1,000 allowance, or sell a single item for over £6,000. If you're a business or regularly buy goods to sell for profit, you're considered a trader and might owe tax on profits, while selling personal belongings usually isn't taxed unless it's a significant profit.
If you're just selling unwanted personal belongings from time to time like old toys and clothes, whether it's online or in person, you don't usually need to tell HMRC.
You will need to tell the HMRC if: you sell more than the 'Trading Allowance' of £1,000 (before deducting expenses). sell a personal item for £6,000 or more, in which case you may be liable for Capital Gains Tax.
Taxable supplies are supplies that have been made to your business via an entity that is registered for GST. When you purchase these items regardless of whether they are second hand or brand new they will have GST included in there price.
The European Union allows the use of a special scheme — "VAT on margin" — when reselling second-hand goods, works of art, collectors' items, and antiques. Under that scheme, the seller has to pay VAT only on the difference between the sales price and the purchase price (the margin).
GST- Sale of second hand goods – Eligibility to input tax credit under Marginal Scheme
How to avoid VAT on second-hand goods?
If a business buys and sells second-hand goods, they can use one of the second-hand margin schemes so that VAT is only due on the profit margin, not the full selling price.
You may still have to pay duties and taxes on second-hand goods – however, if the goods are classified as antiques or original pieces of art, you could benefit from reduced VAT depending on the national regulations and if your goods meet the correct criteria.
VAT margin schemes tax the difference between what you paid for an item and what you sold it for, rather than the full selling price. You pay VAT at 16.67% (one-sixth) on the difference. You can choose to use a margin scheme when you sell: second-hand goods.
1. Just selling your old stuff? If you're only flogging personal items you already owned, you're not trading. That means there's usually no tax to pay and no need to tell HMRC.
Everyone has a tax-free trading allowance of £1,000. Whether you're a company or a sole trader, this allowance allows you to earn up to £1,000 in trading income without needing to report it to HMRC. As mentioned above, you will only be expected to pay tax if you go above this threshold.
You can generally sell on Vinted without paying tax if you're just clearing out personal items for less than you paid, but if you're buying to resell (trading), you can earn up to £1,000 in profit/income tax-free under the UK's Trading Allowance before you need to tell HMRC. This £1,000 limit applies to your total income across all selling platforms, not just Vinted. Above this, you must register for Self Assessment, though you only pay tax on profits above the allowance.
Is buying and selling second-hand goods not subject to GST?
Yes. There is no exemption for purchase of second hand goods from a registered person and hence the supplier has to pay GST as per the tax invoice received from the registered person.
Healthcare: Medical services, hospital care, and the supply of certain medical products may also be exempt from VAT. Financial services: Many financial services, like insurance and banking, are VAT-exempt. Charitable activities: Donations and activities carried out by registered charities may be exempt from VAT.
Yes, you must declare eBay sales to HMRC if you're "trading" (buying to resell or making items for profit) and your income exceeds the £1,000 Trading Allowance in a tax year; selling personal, used items you owned usually doesn't count, but selling for a profit does, and HMRC now receives data from platforms like eBay, so accurate record-keeping is crucial to avoid penalties.
Do you have to pay GST on second-hand imported goods?
Sales of low value imported second-hand goods by a non-resident individual through an online marketplace are deemed to have been made by the EDP operator. Therefore, the price of the second-hand good will include GST if the EDP operator is GST-registered.
Another common misunderstanding is that tariffs only apply to brand-new products. In most cases, tariffs apply to used equipment just as they do to new gear. If an LED wall was originally manufactured in a tariffed country such as China, its used status doesn't exempt it.
