Selling personal items to declutter or trading: what's the tax situation?

[lizbarclaybiz]

I’ve seen a flurry of questions over the weekend on the rules around selling your personal belongings that you no longer want. If you are simply selling stuff to get rid of it and declutter you aren’t running a business. If you’re selling things that you’ve made for the purpose of selling and making an income as a business, you’re trading. The rules are different in these cases.
If you’re just selling your own unwanted personal belongings online, you usually don’t have to pay tax. However, if you sell items for £6,000 or more you may owe Capital Gains Tax, and if you’re regularly buying or making items to sell for profit, you may owe Income Tax once your earnings exceed the £1,000 trading allowance.
Selling Personal Possessions
No Income Tax if you’re simply selling unwanted possessions like clothes, furniture, phones, jewellery, or household goods
Capital Gains Tax (CGT) may apply if a single item sells for £6,000 or more or a set of items (e.g., matching ornaments, book collections) sells for £6,000 or more in total. HMRC treats collections as one item for CGT purposes

Trading vs Selling personal items:
If you buy or make items to sell for profit (e.g., crafts, vintage resale, upcycling), HMRC considers this trading.
You get a £1,000 trading allowance per tax year so if your total trading income is £1,000 or less, you don’t need to declare it. If it’s above £1,000, you must register with HMRC and submit a Self Assessment form every year on which you put the detail of you earnings from all sources and you may owe tax depending on your total income.
Platform Reporting Rules (from 2025)
Online platforms (e.g., eBay, Vinted, Etsy, Depop) must report sellers’ earnings to HMRC if:
o You sell more than 30 items, or
o Earn more then £1,735 in a year.
This doesn’t automatically mean you owe tax, but HMRC will check if your selling counts as trading and will take your total income from all sources into consideration.
Personal Tax Allowance
Even if you have more income than the £1,000 trading allowance, you only pay tax once your total income (job + side sales or pension income or income from some other source) is more than the personal allowance (£12,570).
However be carfeul. Even if items are second-hand, frequent resale for profit can leave you having to pay tax. Keep receipts and records of sales to prove whether items were personal possessions or trading stock. If you don’t declare trading income above £1,000 you could face fines.