Selling on Vinted, eBay, Etsy, Depop or Amazon? What HMRC Expects You to Record in 2026/27

Selling online is exciting until the tax bill arrives. This guide explains exactly what records you need to keep, when HMRC expects a return, and how to stay on top of your finances from your very first sale on any platform. Whether you sell vintage clothing on Vinted, handmade jewellery on Etsy, trainers on Depop, electronics on eBay or private-label products on Amazon, the core bookkeeping principles are the same.

Why Online Sellers Need Proper Bookkeeping

The rules for online sellers have not become more lenient. If anything, they have tightened significantly, with digital reporting requirements now targeting platform sellers directly and Making Tax Digital for Income Tax starting to change how sole traders keep and report their records.

Good bookkeeping is not just about compliance. When you have clean records, you can:

Whether you sell vintage clothing on Vinted, handmade jewellery on Etsy, trainers on Depop, electronics on eBay or private-label products on Amazon, the core bookkeeping principles are the same.

The £1,000 Trading Allowance: What It Means for You

HMRC's Trading Allowance lets you earn up to £1,000 gross from self-employment or casual trading in a single tax year (6 April to 5 April) without paying any tax on it, and without needing to register for Self Assessment.

This sounds helpful, and for genuine occasional sellers it is. But there is an important catch:

You cannot claim both in the same tax year. Our 2026/27 UK Online Seller Tax Template automatically compares both options and applies whichever saves you more tax.

When You Must Register as Self-Employed

You need to register with HMRC for Self Assessment if any of the following apply in a tax year:

• Your gross trading income is over £1,000. This covers buying items to resell at a profit, selling handmade items, digital downloads or services, across all platforms combined.

• You have other untaxed income, such as rental income or freelance work, that needs to be declared.

Buying items with the intention of reselling them at a profit is trading regardless of volume. Selling your own unwanted belongings for less than you paid is not usually trading. If you are unsure whether your activity counts as trading, HMRC's badges of trade test is the standard framework, but the simplest rule is this: if you are buying items to make a profit, you are trading. Our guide to whether you owe tax on your Vinted sales walks through the five questions that decide it.

Registering late can lead to a penalty based on a percentage of the tax that was due and unpaid. Our guide to the 5 October registration deadline explains who needs to act and what happens if the date is missed.

DAC7: Why Platforms Are Now Reporting You to HMRC

From 1 January 2024, the UK implemented the DAC7 digital platform reporting rules. Under these rules, online marketplaces must collect information about sellers and report it directly to HMRC if a seller:

• Makes 30 or more sales in a calendar year, or

• Earns more than €2,000 (approximately £1,700) in a calendar year

This means HMRC can cross-reference the platform data against your Self Assessment return or, if you have not filed one, flag that you may have unreported income. The days of assuming low-volume selling is invisible to the taxman are over. Our guide to Vinted, your National Insurance number and HMRC explains what is reported and why.

What Records Do You Actually Need to Keep?

HMRC requires self-employed people to keep records for at least 5 years after the 31 January submission deadline for the relevant tax year. For the 2026/27 tax year, that means keeping records until at least 31 January 2033.

Here is what you should record for every sale:

And for your business as a whole:

If you are partway through the year with gaps in your records, our guide to filing Self Assessment with no records explains how to rebuild them from bank statements and platform reports.

Allowable Expenses: What You Can Deduct

Every pound you legitimately claim as a business expense reduces your taxable profit, which directly reduces your tax bill. Most online sellers leave money on the table by under-claiming expenses.

Platform and Selling Costs

• Selling fees charged by eBay, Etsy, Depop or Amazon

• PayPal or payment processing fees

• Promoted or boosted listing fees

Stock and Packaging

• Cost of buying items to resell

• Packaging materials: boxes, bubble wrap, tissue paper, labels

• Postage and shipping costs you pay yourself

Equipment and Subscriptions

• A proportion of your phone bill (the business-use percentage)

• Camera or photography equipment for listing photos

• Accounting software or spreadsheets

• Storage subscription fees (for digital sellers)

• Home office costs, if you run your business from home

For the categories sellers most often overlook, our guide to expenses sole traders commonly miss covers the seven most commonly missed.

The Tax You Will Owe: A Simple Breakdown

Once you have calculated your taxable profit (income minus allowable expenses, or minus the £1,000 Trading Allowance), here is how UK tax is applied for the 2026/27 tax year:

Our guide to payment on account explains exactly how this works. If you also have a job, our guide to PAYE and self-employment in the same tax year explains how both income streams are treated together.

Setting Money Aside: The Set-Aside Percentage Method

One of the most effective habits for online sellers is to set aside a fixed percentage of every sale towards your tax bill as you go, rather than scrambling to find the money in January.

The exact percentage depends on your total income and whether you have other employment, but here is a rough guide for sole traders with no other income:

These are estimates. Your actual liability depends on your full financial picture, including any PAYE employment income. The 2026/27 UK Online Seller Tax Template calculates your personalised set-aside percentage automatically and applies it to each month's income in the monthly summary.

Platform by Platform: What to Know About Your Income Figures

Vinted

Sellers on Vinted do not pay listing or selling fees. The buyer pays a buyer protection fee and the postage, and neither is your income. For tax purposes, your income is the item price you receive. Check your Vinted sales history for the correct figures. Vinted will report you under DAC7 if you meet the thresholds.

eBay

eBay charges final value fees, a per-order fee and optional promoted listing fees. Your gross income is the total paid by the buyer, including postage charged. Your eBay fees are a deductible business expense. Download your monthly financial statement from eBay Seller Hub for accurate records.

Etsy

Etsy charges listing fees of around 16p per item, transaction fees of 6.5% of the sale price including postage and gift wrap, and payment processing fees. Your gross income is the full sale amount collected. All Etsy fees are deductible. Etsy provides a monthly payment account CSV you can use for bookkeeping.

Depop

Depop removed its selling fee for UK sellers in 2024, but payment processing fees and boosted listing fees still apply. As with other platforms, your gross income is the full buyer payment. Depop's seller receipts and the app's sales history are your primary income records.

Amazon

Amazon sellers face a more complex fee structure: referral fees that vary by category, Fulfilment by Amazon fees if you use FBA, and the monthly subscription for a Professional account. Amazon provides detailed financial reports in Seller Central, including the Transaction View and the Date Range Report, which are essential for accurate bookkeeping. Amazon is one of the platforms most likely to trigger DAC7 reporting for active sellers.

Setting Up Your Bookkeeping System: Step by Step

You do not need expensive software to keep good records as an online seller. Here is a practical system you can set up in an afternoon:

1. Open a dedicated bank account or payment account for your selling income. Keeping personal and business money separate is the single most valuable habit you can build.

2. Record every sale as it happens, or at minimum weekly. The longer you leave it, the more you will forget or mismatch.

3. Download monthly statements from each platform (eBay Seller Hub, Etsy Payment Account, Vinted sales history, Depop receipts, Amazon Seller Central) and file them by month and year.

4. Photograph or scan every receipt for stock purchases, packaging and equipment. Name files consistently, for example 2026-10-09_supplier_amount.

5. Reconcile monthly. Your recorded income, less platform fees, should match what actually landed in your bank or PayPal account.

6. Set aside tax money each month based on your estimated set-aside percentage.

Common Bookkeeping Mistakes Online Sellers Make

Confusing gross income with profit

Your tax thresholds and the DAC7 reporting thresholds are based on gross income, meaning the full sale price. Many sellers report only what arrived in their bank account after fees, which understates their income and can lead to errors in both directions.

Forgetting the cost of stock

If you are a reseller, the price you paid for the items you sell is a deductible expense. This can significantly reduce your taxable profit. But you can only claim it if you have the receipt or proof of purchase.

Missing the Trading Allowance versus actual expenses comparison

Many sellers automatically claim the £1,000 Trading Allowance without checking whether their actual expenses are higher. If your platform fees and packaging costs alone come to £1,400, claiming the allowance means you overpay tax on the £400 difference.

Not registering on time

The 5 October registration deadline is often missed by sellers who earned over £1,000 in their first year but did not know they needed to register. Late registration can lead to a penalty based on the tax that was due and unpaid.

Ignoring Payment on Account

If your first-year Self Assessment bill exceeds £1,000, HMRC will usually add a Payment on Account due in January. This means your first tax bill can effectively be 150% of your expected amount: 100% for the year just ended plus a 50% advance payment for the next year. Sellers who have not saved for this are often caught short.

How the 2026/27 UK Online Seller Tax Template Helps

Spreadsheet-based bookkeeping works well for most sole traders and online sellers who do not need a full accounting package. Our 2026/27 UK Online Seller Tax Template is designed specifically for people selling on Vinted, eBay, Etsy, Depop, Amazon and similar platforms, and it handles the full journey from first sale to tax return.

The template includes:

It works equally well for service-based sellers (freelancers, Etsy digital download creators, Amazon KDP authors) and physical goods resellers.

Once you exceed the £1,000 threshold, you have two options for calculating your taxable profit:

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