Does MTD apply to Etsy, eBay and online marketplace sellers?

Clearing out a wardrobe on Vinted is a different thing from running a shop on Etsy, but since January 2024, UK online marketplaces have had to report seller data to HMRC. That reporting rule doesn’t create any new tax; it just means HMRC can now see activity that may already have been taxable.

When does selling online become taxable trading?

The test is intention and pattern, not the platform. Occasionally selling your own unwanted possessions for less than you paid for them isn’t trading, and isn’t taxable. Regularly buying, making or sourcing things with a view to reselling at a profit is trading, and that income counts, even at small volumes. If you’re not sure which side of the line a particular kind of selling falls on, that’s a question for your accountant or HMRC, not a guess.

What is the £1,000 trading allowance?

If your trading income (selling plus any other side income) adds up to £1,000 or less in a tax year, the tax-free trading allowance normally covers you and there’s nothing to file. Over £1,000, you need to tell HMRC, usually by registering for Self Assessment by 5 October after the tax year ends.

When does MTD apply to marketplace sellers?

• From April 2026: gross income over £50,000
• From April 2027: gross income over £30,000
• From April 2028: gross income over £20,000

What counts as income: payout or sale price?

Those dates come from HMRC’s guidance on who needs to use MTD for Income Tax (opens in a new tab), and the threshold uses gross income before costs, combined with any self-employment or property income you have. For sellers, that means the full sale price the buyer paid, not the amount that lands in your account after the marketplace’s fees and postage are taken off. Those fees, along with what you paid for stock or materials, are recorded as expenses (“Goods and materials” covers stock cost) rather than netted off your income. What goes in each category has the full list.

What to do now

• Confirm your date with the two-minute checker.
• Keep digital records of sales, marketplace fees and what you paid for stock.
• Put your quarterly deadlines in your calendar from the deadlines page.

See how QuarterFile handles marketplace payouts and stock costs, on the marketplace sellers page.