Do you pay tax on Vinted sales? The £1,000 trading allowance explained

Most Vinted sellers never owe a penny of tax. But if you buy things to resell, there's a line at £1,000 a year that matters, and it catches people out because it's measured on income, not profit.

Step one: are you trading?

HMRC treats two kinds of selling very differently. Selling your own unwanted belongings is like a car boot sale: GOV.UK says you don't usually need to tell HMRC. Buying or making things in order to sell them at a profit is trading, even as a side hustle.

Signs you're trading: you buy stock (charity shop runs, wholesale bundles, clearance) with the plan of reselling it; you sell the same kinds of items repeatedly; you're doing it to make money rather than to clear space.

The trading allowance

The trading allowance lets you earn up to £1,000 of trading income each tax year tax-free. If your trading income is £1,000 or less, you don't need to tell HMRC about it at all.

Three details people miss:

• It's gross income. £1,000 means the money coming in, before what the stock cost you. Sell £1,200 of items you paid £900 for and you've made £300 profit, but you're over the allowance.
• It's every side hustle combined. Vinted, eBay, Depop, a market stall and dog walking all share the same £1,000.
• It runs on the tax year, 6 April to 5 April. Vinted's reporting to HMRC runs on the calendar year, so the two totals won't match.

Over £1,000: what happens

You'll need to register for Self Assessment by 5 October after the end of the tax year, then file a return. On that return you pick one of two ways to work out your taxable profit:

• Use the allowance: income minus £1,000. No receipts needed.
• Use your actual costs: income minus what you really spent on stock, postage you paid, packaging and so on.

You can't do both. Resellers with high buying costs usually do better claiming costs; sellers who sourced cheaply often do better with the allowance. Example: £3,000 income and £400 of costs gives £2,000 taxable with the allowance versus £2,600 with costs, so the allowance wins. With £1,800 of costs it flips.

Whether tax is actually due then depends on your other income, because trading profit is added to it. If your total stays within your Personal Allowance, there may be nothing to pay, but you still have to file.

Keep records from day one

If there's any chance you'll pass £1,000, record what you paid for each item and what it sold for. It's the difference between being able to claim costs and being stuck with the allowance. A spreadsheet works; here's how to set one up.

Check your own position in a minute with the Vinted tax checker.

General information from GOV.UK, not tax advice. If your situation is complicated, speak to HMRC or an accountant. Sources: Tax-free allowances on property and trading income, Tax help for hustles, Register for Self Assessment.