HM Revenue & Customs (HMRC) is examining the earnings of millions of individuals selling goods and services through online platforms, as part of efforts to ensure full tax compliance in the digital economy.
Starting in 2024, platforms such as eBay, Vinted, and Etsy have been required to provide detailed sales data to HMRC for users exceeding certain thresholds.
Overview of HMRC’s Focus on Online Selling
HMRC has intensified its scrutiny of individuals trading through digital platforms. This move is designed to identify those who may not be fully declaring taxable earnings.
Authorities have cited the growing scale of the online marketplace as a motivation for bolstering compliance measures across internet-based transactions.
New Reporting Requirements for Online Marketplaces
From January 2024, online marketplaces have been obliged to report to HMRC details of users who earn more than £1,700 per year, or who complete over 30 sales annually.
The measure was implemented as part of broader global efforts to enhance tax transparency in digital commerce.
Growth in Reported Sales and Seller Numbers
Data from 2025 show a significant increase in the number and value of reported sales. Nearly four million sellers were recorded,
up from approximately 1.5 million the previous year. The value of sales notified to HMRC rose sharply from £25.5 billion to £54.8 billion.
Addressing the Hidden Economy
Authorities believe these new data-sharing rules will assist in tackling the hidden economy activities not declared for tax purposes. With sizeable sums now under review, HMRC is expected to use this information to close the tax gap and ensure all eligible sellers fulfil their reporting obligations.
HMRC’s Review and Compliance Systems
Although HMRC has begun accumulating large volumes of sales data, its current systems are not yet fully equipped to automatically process this information and issue penalties. HMRC has confirmed its compliance tools are still in the final stages of development.
Final Summary
The HMRC’s enhanced focus on online sales reflects the changing nature of commerce in the UK, with millions now participating in digital marketplaces.
By mandating the reporting of higher volume sellers and improving data systems, HMRC aims to enforce long-standing tax obligations equitably.
