What Online Platforms Now Report to HMRC and What It Means for Your Tax Position

Since 1 January 2024 the assumption that HMRC cannot see marketplace sales is no longer valid. The digital platform reporting rules require eBay, Vinted, Etsy, Amazon, Airbnb and other platforms to collect and submit seller income data to HMRC each year. The first batch of reports, covering the whole of 2024, was sent to HMRC in January 2025. For sellers, the most important thing to understand is what the data means, what it does not mean, and what to do if your numbers do not line up.

Platforms now send HMRC your sales data: the short version

Under the reporting rules for digital platforms, platforms such as Amazon, eBay, Etsy, Vinted and Airbnb must report seller income to HMRC. The rules came into force on 1 January 2024. The first annual reports, covering the 2024 reportable period, were due by 31 January 2025. That deadline repeats every 31 January for the preceding calendar year. HMRC therefore now holds income data on platform sellers that it can cross-reference against Self Assessment returns, or use to identify sellers who have not filed at all.

Being reported does not automatically create a tax liability. Tax liability flows from your trading status and your total income, not from the act of platform reporting. The distinction matters enormously and is the single most misread fact in coverage of this topic.

Which platforms must report, and from when

The rules apply to digital platforms that facilitate the sale of goods, property rental, personal services, and transport. Named platforms subject to the rules include Amazon, eBay, Etsy, Vinted and Airbnb. The rules cover categories of platform rather than a fixed brand list, so new platforms that meet the criteria fall within scope as they grow.

What data gets reported to HMRC

Platforms collect and report identifying information (name, address, date of birth, National Insurance number or tax identification number) alongside income data (total consideration received, number of transactions, and any fees, commissions and taxes withheld by the platform). HMRC can therefore match a report to an individual and compare the reported income against their Self Assessment return, or identify that no return has been filed.

The reported figure is typically gross sales value before platform fees. For marketplace sellers this is consistent with how taxable turnover is measured for other purposes: VAT registration is triggered by gross sales, not the net payout that arrives in your bank account after fees are deducted. The platform report reflects the same gross figure.

The reporting exclusion: fewer than 30 sales AND €2,000 or less

Platforms do not have to report a seller who received €2,000 (about £1,700) or fewer for fewer than 30 sales of goods in the year. Both conditions must be met simultaneously: under 30 sales AND €2,000 or less. A seller with 28 sales and €2,500 in receipts does not qualify for the exclusion. A seller with 35 sales and €900 in receipts does not qualify either.

This exclusion has generated more confusion than any other aspect of the rules. It is a reporting administration threshold, not a tax-free allowance. A seller below both conditions may still owe tax if they are trading. A seller above both conditions has the same tax position as before: nothing changes in their underlying liability simply because a report is sent.

"Reported" does not mean "taxed": tax follows trading status

Whether your platform income is taxable turns on whether you are trading, not on whether HMRC has received a report about you. Two sellers with identical platform sales can have very different tax positions.

Selling personal possessions you no longer want (a wardrobe clear-out on Vinted, old electronics on eBay) is generally not trading. You owned the items personally and are selling at typically less than you paid. There is no profit motive, no systematic buying to resell, no business activity. Tax does not arise on that activity.

Buying goods specifically to sell at a profit is a different matter. Whether that activity constitutes trading is determined by HMRC's badges of trade: the profit motive, the frequency and pattern of transactions, how you acquired the goods, whether you modified them before sale, and so on. There is no sales-count rule. Selling 200 items cleared from your attic over a decade is different from buying 200 items every month to resell at a margin. The HMRC Business Income Manual from BIM20205 sets out the badges in detail.

If you are trading, the £1,000 trading allowance may eliminate the liability if your gross trading income is £1,000 or less in the year. Above that threshold, you need to decide whether to claim the allowance (deducting £1,000 instead of actual costs) or deduct actual expenses. For sellers with real cost of goods, deducting actual costs usually gives the better result. See the trading allowance guide for the full worked example.

For a full treatment of whether your activity is trading, see the trading allowance and side-hustle guide.

What to do if the numbers HMRC sees do not match your return

HMRC can now cross-reference the gross income figure a platform reports against the income declared on your Self Assessment return. Discrepancies can trigger an enquiry. If you have filed a return that does not include platform income that should have been declared, or if you have not filed at all, acting now rather than waiting for a letter puts you in a significantly better position.

Voluntary disclosure before HMRC makes contact is treated more favourably than a prompted disclosure made in response to a letter or enquiry. Penalties are assessed as a percentage of the unpaid tax, and the percentage is substantially lower for unprompted disclosures. Interest runs from the date the tax was due regardless of when a disclosure is made, but minimising the penalty component is within your control.

If your gross sales on a platform differ from the figure the platform holds (for example, because refunds, cancelled orders or promotional returns are excluded from the platform's view), keep the documentation to explain the difference. A clean audit trail is the fastest way to resolve any HMRC query.

For help working through a specific mismatch, see the settlement payout reconciliation service, which produces a gross-to-net bridge between platform reports and your accounting records.

If you receive an HMRC letter about your online sales

A growing number of sellers are receiving HMRC nudge letters and check-and-correct notices that reference online marketplace income. These are prompted disclosures and are subject to higher penalty rates than voluntary action. The appropriate response depends on the type of letter, the period it covers, and whether the income has been fully declared.

The HMRC letter response service covers the full process: how to read each letter type, what HMRC is asking, how to calculate any underpayment, and how to make a disclosure that minimises penalties. This page does not replicate that walkthrough.

The two misreadings to avoid

Consumer press coverage of the platform reporting rules has generated two opposite errors, both of which leave sellers exposed.

Panic below the threshold. Some sellers believe that being below the 30-sale/€2,000 exclusion means they have no tax exposure. It does not. If you are trading at any volume, your profits are taxable. The exclusion only determines whether the platform files a report. It does not immunise income.

Complacency above the threshold. Other sellers believe that because a report has been filed they are now in HMRC's system and any issue has been surfaced. Being reported is not the same as being compliant. If the income has not been declared correctly on a Self Assessment return, a platform report makes non-compliance more visible to HMRC, not less of a problem.

The correct frame: platform reporting changes HMRC's visibility. Your tax obligations are determined by trading status, income levels and your filing history, which remain unchanged by whether a platform sends a report or not.

If you sell at meaningful scale on any marketplace and have not taken advice on your position, the marketplace sellers hub is a good starting point, or see the online seller research index for register data on how many UK online retail companies form, dissolve and survive.