What happens after a platform reports your sales to HMRC?

When eBay reports your sales to HMRC (DAC7)

From January 2024 onward, eBay (and all similar platforms) must send a DAC7 report to HMRC every year.This report includes:

• Seller’s name, address, and NINO (if provided)

• Total sales amount (gross)

• Number of transactions

• Fees, commissions, and refunds
  

They must do this if, in a calendar year, you:

• Sell more than 30 items, or

• Make over €2,000 (around £1,740) in sales.

This is purely an information report — it doesn’t trigger automatic tax, penalties, or a requirement to fill in a return by itself.

What HMRC actually does with that data

HMRC receives a giant file from eBay and all the other platforms each year. They don’t auto-issue tax bills or instantly demand returns.

Instead, they:

• Cross-check the reported names and sales against existing Self Assessment records.

• If you’re already registered for Self Assessment, they’ll expect your figures to include this income.

• If you’re not registered, but your totals look like “trading activity,” they may write to you (usually later in the year) inviting or instructing you to register.

That’s why, in most cases, you don’t have to do anything immediately after eBay reports your sales — unless you know you’ve earned over £1,000 from trading.

So when do you actually have to file a return?

You need to complete a Self Assessment tax return if any of the following apply:

1. You’ve earned over £1,000 in total trading income (not profit) in a tax year.

2. HMRC has written to you asking for a return.

3. You want to declare a loss (to offset against future profits).

4. You’ve made income from other self-employed work (Etsy, Depop, etc).
   

If you’re under £1,000 — or it’s all personal item sales — you don’t need to file or register.

What happens if HMRC writes to you

If HMRC receives data suggesting you may be trading, they’ll send a letter or email that usually says something like:

“We’ve received information from online platforms showing you’ve earned income.If you believe this income should be declared, please register for Self Assessment.”

They’ll give you a deadline to respond — usually by 5 October following the tax year.

You then:

1. Register for Self Assessment on GOV.UK

2. Fill in your return (covering the 6 April–5 April tax year)

3. Pay any tax owed by 31 January

If it turns out the income was from personal sales, you can simply tell them that.

Example Scenarios

Seller	Sales	Trading?	eBay reports to HMRC?	HMRC expects tax return?
Lisa	£800 total	Selling old clothes	❌ No	❌ No
Darren	£1,500 total	Buys to resell	✅ Yes	✅ Must file
Raj	£2,200 total	Mix of own + trading	✅ Yes	✅ File trading part only
Emma	£2,500 total	Only own belongings	✅ Yes	❌ No, but HMRC may ask for clarification

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