HMRC Now Has Data on Almost 4 Million Online Sellers: Are You One of Them?

If you sell on Vinted, eBay, Etsy or Amazon, rent out a room on Airbnb, drive for an app or earn from content, HMRC may already hold your details. Since 2024, online platforms have been required to report what their sellers earn, and the volume of data reaching HMRC has grown sharply. For most people that is not a cause for alarm, and for many it will lead nowhere. But for anyone whose selling has grown beyond clearing out the loft, the real question is no longer whether HMRC has the information. It is whether the numbers on your tax return match it. This guide sets out what is reported, when tax is actually due, how far back HMRC can look, and how to respond sensibly.

What HMRC Actually Receives

New rules that began on 1 January 2024 mean that digital platforms must collect details about their sellers and report them to HMRC, with the information collected each year sent to HMRC by the following January. A “seller” includes individuals and companies, and covers people who sell goods, provide services such as driving or freelancing, or rent out property.

Platforms collect your name, address, date of birth and National Insurance number, and report your income from the platform. They must also give you a copy of what they send. The copy shows what you earned in the calendar year, after fees and commission, broken into quarters.

There is an exclusion for goods sellers: you are not reported if you make fewer than 30 sales and receive less than 2,000 euros (about £1,700) for those sales in the year.

The scale of the data is striking. BDO reports, from a Freedom of Information request, that HMRC received almost 4 million seller reports for 2025, covering nearly £55bn of earnings, compared with 1.46 million sellers for 2024. These figures include companies and other non-individual sellers, so they are reports rather than individual people. BDO also expects a fresh enforcement push as HMRC builds the tools to analyse the data. Earlier “one to many” campaigns, which we covered in our piece on online marketplace sellers, gave recipients 30 days to respond.

Being Reported Is Not the Same as Owing Tax

HMRC’s own guidance is clear that a platform reporting your details does not automatically mean you owe tax. Tax arises where you are trading or making a capital gain.

• Clearing out your own things. You are unlikely to pay Income Tax on selling personal possessions. Capital Gains Tax may apply if a single item (or a set) sells for more than £6,000.
• Buying or making to sell. If you buy goods intending to sell them at a profit, or make goods to sell (including as a hobby), HMRC treats you as probably trading.
• Services, content and rentals. Income from services, online content (including gifts and services received for promoting products) and property lets can also be taxable.

You must add together your trading income from all these activities. If it exceeds the £1,000 trading allowance in a tax year, you need to tell HMRC, and you must register for Self Assessment by 5 October after the end of that tax year. Note that platforms report by calendar year, while tax is calculated for the tax year running from 6 April to 5 April, so the figures will not match without some adjustment.

Our earlier articles on the gig economy and on content creators cover these groups in more detail.

Why the Data Matters: Matching and Time Limits

HMRC does not need to open a dramatic investigation to use this information. A simple comparison between what a platform reported and what appears on your return, or the absence of a return altogether, can lead to a letter. The more serious point is how far back HMRC can then go. The time limits are set by section 36 of the Taxes Management Act 1970:

The last row is the one many online sellers do not expect. The duty to notify HMRC arises where you have taxable income and have not been sent a tax return. “I didn’t think it counted” is therefore not a safe assumption. See our guide to careless, deliberate and concealed behaviour and our explainer on discovery assessments for how HMRC applies these limits.

Penalties: Why Timing Is Everything

Where tax has gone unpaid because you failed to tell HMRC, the penalty is a percentage of the tax lost under Schedule 41 of the Finance Act 2008. The range depends on your behaviour and, crucially, on whether you came forward before HMRC contacted you.

A disclosure is only “unprompted” if you make it at a time when you have no reason to believe HMRC has discovered the failure or is about to. HMRC will often treat a disclosure made after it has written to you as prompted. That is why voluntary disclosure before a letter arrives can change the outcome so significantly. Interest is charged on top. For the wider picture, see our page on HMRC penalties.

What a Tribunal Made of an Online Seller’s Records

The case of Adspec Ltd v HMRC [2022] UKFTT 285 (TC) is an extreme example, since it involved a VAT-registered company importing and selling tablets through Amazon and eBay in large volumes. But it shows how HMRC uses platform data and what happens when records are not produced. We reported on it at the time in our article on HMRC estimating turnover through eBay.

HMRC compared import data with the company’s returns and used third-party sales figures from one eBay account to conclude that sales were significantly understated. The company did not provide full records, so HMRC raised assessments to its best judgement. The First-tier Tribunal upheld them and dismissed the appeals. It rejected the argument that HMRC should have gone and obtained data from the other accounts, since HMRC is not required to do the taxpayer’s work. It also found the behaviour deliberate, drawing on the failure to provide records and co-operate, and applied penalties in the 35% to 70% range for a prompted deliberate disclosure with only modest reductions.

The lesson for sellers is practical: platform data is real evidence, records are your answer to it, and the way you engage with HMRC can decide whether behaviour is treated as careless or deliberate.

If You Think You May Be on HMRC’s List: Sensible First Steps

1. Get your own figures. Download the report your platform must give you and convert calendar-year totals into tax-year totals.
2. Work out whether you are trading. Use HMRC’s online checker, adding together all your trading activities.
3. Pull together your records. Sales, purchase costs, fees and postage. Their absence is what hurts most when HMRC estimates your income.
4. Consider coming forward before HMRC writes. HMRC’s guidance explains how to tell it about underpaid tax from previous years. Where several years or large sums are involved, take advice on how the disclosure is made.
5. If a letter arrives, do not ignore it and do not rush a reply. Check it is genuine, note the deadline, and read our guides to understanding HMRC letters and HMRC compliance checks.

Getting the First Reply Right

Most people who sell online will never hear more than routine data matching, and many will owe nothing. For those whose activity has grown, with bought-in stock, several platforms and several years of sales, the question is what you say, and to whom, once HMRC asks. An explanation given casually can later be read as carelessness, or worse. It is also worth knowing that confidential advice from a lawyer is protected in a way that communications with an accountant are not. Where the amounts are significant, a conversation with a tax litigator who has seen how HMRC compliance teams work, before you reply or disclose, can protect both your position and your account of events. For more on how HMRC investigations proceed, see our overview of HMRC tax investigations.