Do I have to pay tax if I sell online - and could it affect my universal credit?

January is a great time to declutter and get rid of those clothes we don’t wear, books we haven’t read and Christmas presents you didn’t want.

And instead of chucking them in the bin or donating them to a charity shop, you might turn to platforms like eBay and Vinted in the hope of making a few quid.

But selling online can raise a few questions.

For example, if you’re making money, could you have to pay tax?

And what does it mean if you’re currently claiming benefits like universal credit?

Well, let’s take these questions one at a time.

Will I be taxed for selling on Vinted or eBay?

If you’re selling things you already own, like clothes, books and toys, and you’re not making a profit, there’s normally no tax to pay.

But if you're trading for profit, rather than just decluttering, you should be declaring sales over £1,000 a year, even if your actual profit is lower.

Since last year, online marketplaces have had to share selling information with HMRC.

They won’t be asked to share data about sellers who make fewer than 30 transactions or £1,735 a year.

If you meet certain thresholds, like selling more than 30 items in a year, you might be asked to complete a seller report.

But don't worry.

That doesn’t automatically mean you’ll have to pay tax.

Ultimately, the aim is to make sure that people who are selling online just for profit pay their fair share in tax.

And for most everyday sellers who are clearing out their cupboards, this simply doesn’t apply.

For more information on buying and selling online, check out HMRC’s Tax Help for Hustles site.

Can I sell items online if I claim universal credit?

Yes, if you’re decluttering and selling unwanted items online, that doesn’t count as income for universal credit.

It’s only an issue if you’re regularly buying items to sell on for profit.

That’s because you’re effectively turning selling online into a business, and that makes you self-employed.

And that, in turn, means you have to report your income and expenses.

It’s also important to remember that the amount of universal credit you can claim is affected by how much you have in savings.

If you have savings of between £6,000 and £16,000, your benefits will be reduced.

So if selling items pushes your savings above £6,000, it could affect your payments.

Selling unwanted items shouldn’t cost you money

Ultimately, if you’re just selling a few unwanted odds and ends to make a little cash, there’s usually no tax to pay and no impact on universal credit.

It’s only if your aim is to make a profit that issues might start to arise.

So if you’re thinking of scaling up your Vinted or eBay selling into something bigger, it’s worth checking the rules first, as well as keeping records of what you sell and why.