Thousands of Vinted users issued warning ahead of October tax deadline – what you can do now
THOUSANDS of Vinted users have been warned of an upcoming tax deadline that could land them with a big bill if missed.
Those who make money selling items online must report their earnings to HMRC if they make a profit.
Firms like Vinted now have to pass on customer data to HMRC if a user sells 30 or more items a year, or earns over £1,700.
The new rules were brought in from the start of this year. Before that, anyone making extra income still had to report their profits.
But now Vinted and other selling platforms and marketplaces share data directly with the taxman.
It is part of a wider tax crackdown to help ensure that those who boost their income via side hustles pay up what they owe.
Anyone online might have to pay tax if they earn £1,000 or more from selling items online.
If the money a member makes on online marketplaces over a year is less than the amount they paid for the items they are selling, then there is no tax to pay.
But those trading for profit might need to pay tax.
It is worth noting that this isn’t a new tax.
Those who earn over £1,000 have always had to declare income and fill in a self-assessment tax return, but it gives the taxman greater visibility over what you earn.
Now Vinted is messaging users directly to remind them they must report their income.
The shopping app has said it will message sellers to let them know if they need to file an HMRC seller form.
Not every customer will contacted, only those who have made over 30 sales or £1,700.
Separately, Vinted said If your total side hustle earnings exceed £1,000, you must register for Self Assessment and pay tax when your income exceeds your personal allowance of £12,570.
Personal allowance is how much you can earn without paying tax.
Sellers have just one week to go to see if they need to register to file a Self Assessment tax return if they haven’t done so before.
The deadline for new sellers to check if they need to submit a Self Assessment and register is October 5.
But the deadline to submit the return – and pay any tax you owe – is January 31, 2025 online.
How does Vinted work?
VINTED is an app where you can buy and sell second-hand clothes and accessories.
Sellers can list items on the app for free and there are no fees for selling items either.
Instead, buyers pay a buyer protection fee on every transaction, worth between 3% and 8% of the sale price before postage, plus 30p to 80p depending on the item’s value.
This fee contributes towards protecting buyers if they have a problem with their order.
Any money you earn as a seller goes into your Vinted Wallet, which you can then withdraw out to your bank account as cash.
But there’s an earlier deadline of October 31 this year if you file via post.
It is worth bearing in mind that,HMRC will £100 find you £100 for failing to file your return a day after the deadline.
Then, a £10 daily fine applies every day you don’t submit your tax return.
Do I have to pay tax on my second-hand sales?
Around 18million people across the UK use Vinted to buy and sell clothes and other items online.
However, if you start earning more than a certain amount you may have to pay tax.
A Vinted spokesperson told The Sun: “If you sell an item for less than you bought it for, then there’s no tax to pay because you’ve made no profit from selling it.”
For example, if you bought a shirt for £30 and sold it for £29 – you’ve made no profit, so there is no tax to pay.
Vinted added: “Generally, only business sellers trading for profit might need to pay tax and provide proof of their transactions.
“This includes sellers who buy items to resell at a higher price than they were purchased for.”
Submitting an HMRC seller form
If you have made 30 sales or £1,700 this year you will be contacted by Vinted and asked to submit the seller report form on the app.
This year, the company said it will only approach new sellers who registered in 2024.
If you do not hear from Vinted then you don’t need to do anything.
However, members who meet the criteria will be asked to add their National Insurance Number to a pre-filled form and check the details are correct before submitting it.
This will be done on the Vinted app.
You don’t need to calculate or count anything yourself.
A Vinted spokesperson said: “Reporting members’ details to the authorities does not necessarily lead to taxation.
“Taxation is a separate matter that doesn’t depend on HMRC reporting.”
They added: “HMRC requires Vinted to collect information from members who meet the criteria mentioned above, regardless of whether or not their earnings are taxable.”
Vinted said that it will be getting in contact with users who need to fill out these forms towards the end of the year.
How do you know if you have to submit a tax return?
Self Assessment is a system HMRC uses to collect income tax.
Tax is usually deducted automatically from wages, pensions and savings, but people and businesses with other incomes must report it in a tax return.
It is not just online sellers who are required to fill out a tex return.
The rule applies to the following:
- Your income from self-employment was more than £1,000
- Earned more than £2,500 from renting out property
- You or your partner received high-income child benefits and either of you had an annual income of more than £50,000
- Received more than £2,500 in other untaxed income, for example from tips or commission
- Are limited company directors
- Are shareholders
- Are employees claiming expenses over £2,500
- Have an annual income over £100,000
Some Vinted users will have to submit a Self Assessment tax return if they earn over £1,000 in profit.
The process is separate from the HMRC reporting requirement, and Vinted users are responsible for handling this themselves.
If you are confused about whether or not you need to file a Self Assessment tax return you can use an online tool on GOV.UK.
The tool lets you submit information about your earnings and then will tell if you need to file one or not.
You must register to make a Self Assessment tax return by October 5.
You can register online via the GOV.UK website.
How to register online
To register online you must log on to your business tax account on the HMRC website and select ‘Add a tax to your account to get online access to a tax, duty or scheme’.
If you do not already have sign in details, you’ll be able to create them when you sign in for the first time.
If you do not want to register online you must send a form to the following address:
Self Assessment
HM Revenue and Customs
BX9 1AN
United Kingdom
What next?
After you submit your form you will then get a unique taxpayer reference code (UTR) and activation code from the HMRC.
It’s a 10-digit number and it might just be called a tax reference.
This tends to arrive in the post 15 days after you register for a tax return.
Upon receiving the UTR you can then file a Self Assessment tax return online via the GOV.UK website or by post.
If you file by post the deadline is October 31 2024.
However, if you file online you have up to January 31, 2025.
Check out our step-by-step guide on filling out a tax return here.
How much can I be fined for filing my taxes late?
You can be fined if you do not file a tax return on time.
Late filing fees are pretty steep, so make sure you get your self-assessment return in before January 31.
According to HMRC, you’ll get a £100 fine for failing to file your return a day after the deadline.
Then, a £10 daily fine applies every day you don’t submit your tax return.
This is capped at 90 days – or £900.
So, on top of the initial £100 fee, a £1,000 maximum late filing fine applies.
If you’re six months late, there’s a further £300 fine or 5% of the money you owe – whichever is higher.
That’s on top of the daily £10 charges built up so far, so there’s no shortcut to a smaller payment once you’re late.
And after 12 months, another £300 or 5% fine applies.
Interest is also added on top of this.
If you deliberately haven’t filed your tax return, a fine of up to 100% of the tax due could also be sent.