Directions for e-trader status

What taxes do e-traders pay?

Are you regarded as an e-trader (selling online) for tax purposes? It depends.

If you sell the odd, unwanted gift or some personal possessions, you might not qualify as a trader.

But if you buy items with the intention of selling them on as quickly and as profitably as you can, then you are a trader and likely to be self-employed.

You may have to pay Income Tax and National Insurance contributions and we will treat you as a self-employed person for that trade. If so, you need to fill in a self-employment form. Register online now as self-employed.

You may also need to register for VAT. Traders of second-hand goods only pay VAT on the margin they make: in other words, they are required to pay VAT on the difference between the price they bought the goods for and the price they sold them for.

But if you fail to register for VAT or keep records to show what you are buying and selling, you could be charged VAT on the full value of the goods you sell. Find out more.

If you believe you are trading and therefore self-employed, you must register to let us know within three months of starting your business, or you could pay a penalty.