If you sell products online, whether that's a full-time Amazon business or a bit of Vinted reselling on the side, the rules around what you need to tell HMRC have changed significantly in the last couple of years. The biggest shift isn't a new tax. It's that HMRC now gets your sales data automatically, whether you send it to them or not.

Here's a clear, current breakdown of what matters.

Platforms now report your sales directly to HMRC

Since January 2024, digital platform reporting rules have required online marketplaces, including Amazon, eBay, Etsy, Vinted, and Depop, to collect and share seller data with HMRC. As of 2026, this is fully in force. If you make more than 30 sales, or earn over roughly £1,750, on a platform in a calendar year, that platform reports your sales directly to HMRC, automatically, every January.

This doesn't create any new tax rules. The rules about who needs to register and pay tax haven't changed. What's changed is that HMRC no longer relies on you telling them; they can now cross-check your Self Assessment return against what the platform reports. A mismatch is likely to trigger an automatic flag.

The £1,000 trading allowance: your first checkpoint

Everyone gets a £1,000 tax-free trading allowance each year. This is measured on gross income, before deducting platform fees, postage, or the cost of your stock.

Under £1,000 total: you generally don't need to register or report anything.
Over £1,000: you must register for Self Assessment by 5 October following the end of the tax year you crossed it, and declare all of your income, not just the amount above £1,000.

One important nuance: genuinely selling your own unwanted personal items, the stuff in your loft, generally isn't taxable trading, regardless of volume. The line HMRC actually looks at is whether you're buying or making things with the intention of reselling for profit. If you are, that's trading, and it counts from the first pound.

The VAT threshold: £90,000, and it's about turnover, not profit

If your taxable turnover crosses £90,000 in any rolling 12-month period, you must register for VAT, and you have 30 days to do it once you cross the line.

The mistake we see most often: sellers track their profit against this figure instead of their turnover. If you buy stock for £70,000 and sell it for £95,000, your profit might only be £25,000, but your turnover is £95,000, and that's what counts. Many sellers cross this threshold without realising it, simply because margins on physical goods can be thin while sales volume is high.

Once VAT registered, you're required to use Making Tax Digital-compatible software to file your returns; manual submission through HMRC's old portal isn't accepted anymore.

Making Tax Digital for Income Tax is now live

If your gross trading income is above £50,000, you're now required to keep digital records and submit quarterly updates to HMRC, rather than filing one return a year. This applies whether your income comes from one platform or several combined. If you're not yet at that threshold, it's worth knowing the bar drops to £30,000 from April 2027, so it's coming for many more sellers soon.

What good record-keeping actually looks like

For every sale, you want to be able to show:

The date and gross sale amount
Which platform it came from
Platform fees and postage costs
The cost of the stock or materials sold
Net amount actually received

A simple spreadsheet is enough for many sellers starting out. What matters is that your own records line up with what the platform is reporting to HMRC, because that's exactly what gets compared if a query is ever raised.

What's coming next

HMRC is currently consulting on a bigger change: making online marketplaces directly responsible for collecting and remitting VAT on domestic sales, rather than leaving it to individual sellers. If this goes ahead, platforms like Amazon and eBay could start accounting for VAT straight to HMRC themselves. It's not law yet, but it signals where things are heading, and it's worth watching if you sell at any real volume.

What to do this week

Check your gross income across all platforms for this tax year. If it's over £1,000, make sure you're registered for Self Assessment.
Track your turnover, not your profit, against the £90,000 VAT threshold, on a rolling 12-month basis.
Keep your own records up to date, so they match what platforms are now reporting automatically.
If you're growing fast, plan ahead rather than reacting once you've already crossed a threshold.

We're here to help

Online selling has become one of HMRC's highest-priority areas for compliance checks, precisely because so much data is now shared automatically. Getting your registration, VAT position, and record-keeping right from the start is far easier than untangling it after a query lands.

At Zara Accountants, we work with sellers across Amazon, eBay, Etsy, Shopify, and more, helping with registration, VAT decisions, and staying compliant as you scale. Get in touch if you'd like us to take a look at where you stand.

This article is for general information only and is not tax advice. Thresholds and rules can change; please contact Zara Accountants to discuss your own circumstances.