eBay Tax Guide 2026/27
By Omair SaoLast reviewed — rates for the 2026/27 tax year. See how we check our figures.
eBay is the UK's largest online marketplace for buying and selling goods. Whether you sell second-hand items from your home or run a business selling new products, eBay provides access to millions of UK buyers. Occasional sellers and full-time businesses both use the platform.
How Much Tax Will You Pay on eBay Income?
If you earn through eBay as a self-employed seller, you pay Income Tax and Class 4 National Insurance on your profits — not your gross earnings. The £1,000 trading allowance means the first £1,000 of income is tax-free. Above that, you deduct either the allowance or your actual expenses, whichever is higher, to arrive at your taxable profit. Use our side hustle tax calculator to get an instant estimate for 2026/27.
Basic rate taxpayer
20% + 6%
Income Tax + Class 4 NI on profit between £12,570 and £50,270
Higher rate taxpayer
40% + 2%
Income Tax + Class 4 NI on profit between £50,270 and £125,140
Trading allowance
£1,000
Tax-free — no Self Assessment below this
A Typical Year on eBay: Worked Example
Assumes a reseller who buys stock at car boot sales and charity shops, with stock, final value fees and postage as the main costs. The figures below assume you also have a £28,000 PAYE job, so your Personal Allowance is already used and every pound of profit is taxed. They are produced with the same 2026/27 tax functions as our side hustle tax calculator.
If eBay were your only income, the £12,570 Personal Allowance would cover the whole profit and no income tax would be due at this level.
What eBay Reports to HMRC
eBay sells goods, so the exclusion is real for casual users: you stay off HMRC's file only if you had fewer than 30 completed sales in the calendar year and were paid less than about €2,000 (roughly £1,700); cross either line and you are reported. Once you trip one, eBay shows a banner asking for your National Insurance number, with payout holds or selling blocks if you ignore it. The data goes to HMRC by 31 January for the previous calendar year, and eBay produces a PDF of what it sent plus a transaction-level CSV under Taxes in the Payments tab of Seller Hub. Appearing on the report is not owing tax: a clear-out with 40 sales is reported but usually taxable nowhere, while a reseller under the thresholds still owes tax above the £1,000 trading allowance.
Getting Started: Staying Compliant from Day One
- 1
Decide honestly which camp you are in: selling things you bought for yourself is not trading; buying to sell on, selling items you made, or flipping regularly is.
- 2
If trading, register for Self Assessment once gross sales pass £1,000, and by 5 October after the end of that tax year at the latest.
- 3
Download the Digital Sales Report PDF and CSV each January and keep them with your stock receipts; the CSV is the easiest way to total postage and fees.
- 4
Keep a stock book showing what each item cost and when it sold; cost of goods is your biggest deduction and the hardest to reconstruct later.
- 5
If a single personal item sells for more than £6,000, read HMRC's guidance on personal possessions, because Capital Gains Tax can apply instead.
Common Mistakes eBay Sellers Make
- Declaring proceeds from personal possessions as income after a reporting email; HMRC's guidance says clearing out your own belongings is not trading.
- Thinking the 30-sale threshold is a tax threshold: it only decides whether eBay reports you.
- Taking the £1,000 trading allowance and also deducting fees and postage; it is one or the other.
Allowable Expense Deductions for eBay
These expenses reduce your taxable profit. Keep receipts for all claims.
Earning and Tax Tips for eBay Sellers
- Selling personal possessions at a loss is not taxable — only profits from trading (buying to sell, or selling items you have made) are taxable.
- Use the £1,000 trading allowance if your total trading income from all platforms is under £1,000 — no need to report it.
- Take high-quality photos with natural light and write detailed descriptions to maximise your selling price.
- Factor in eBay fees and postage costs before pricing items — a £10 item may net you only £7–8 after fees and postage.
Frequently Asked Questions
Do I need to pay tax on eBay sales?
If you are selling personal possessions (items you bought for your own use), you generally do not pay income tax on the proceeds, even if you sell them for more than you paid — though Capital Gains Tax could apply for individual items sold for over £6,000. If you are buying items to resell at a profit, or making items to sell, this is trading income and is subject to income tax above the trading allowance (£1,000).
Does eBay report my sales to HMRC?
Yes. Under the OECD's Platform Economy Reporting rules, eBay is required to report seller information to HMRC if you make 30 or more sales in a calendar year or receive €2,000 or more in gross proceeds. This does not mean you owe tax — it simply means HMRC receives the data. You are still responsible for determining whether your sales are taxable.
What is the £1,000 trading allowance?
The trading allowance lets you earn up to £1,000 from self-employment or casual trading without paying tax or needing to register as self-employed. This covers all your trading income combined (not per platform). If your trading income exceeds £1,000, you must register with HMRC and file a Self Assessment return. You can choose to deduct the £1,000 allowance instead of claiming actual expenses.
Official Sources
The rules on this page come from the following official pages and were checked on 25 September 2026. Read how we check our figures.
Related Tools & Guides
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Side Hustle Tax Guide 2026
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