The £1,000 trading allowance explained for Vinted sellers

The trading allowance is the single most useful — and most misunderstood — tax rule for UK resellers. Here is how it actually works.

1. £1,000 of gross income, not profit

The allowance covers up to £1,000 of gross trading income per tax year (6 April to 5 April). Gross means total sales, before any costs. Sell £950 worth of flipped items: fully covered, no tax, and generally no need to file. Sell £1,050: you are over, even if your profit was only £200.

2. Over £1,000: you choose your deduction

Once you file Self Assessment, the allowance becomes a choice between two ways of working out taxable profit:

• Actual expenses: profit = sales minus what your stock and supplies really cost you. Best when your costs are high relative to sales — common for resellers with thin margins.
• Partial relief: profit = sales minus a flat £1,000, ignoring real costs. Best when your costs are low — for example if you sell items sourced for pennies.

You pick whichever gives the lower profit, and you can choose differently each year. But you cannot do both, and if you use the allowance you cannot also claim expenses or losses.

3. Where sellers get it wrong

• Counting profit instead of gross. The £1,000 threshold is takings, not margin.
• Forgetting postage income. If the buyer pays you for postage as part of the sale, it is part of gross income.
• Mixing personal and trading sales. Your old jeans are not trading income — keep them mentally (and ideally visibly) separate from bought-to-sell stock.
• No records. If HMRC ever asks, "I think I was under £1,000" is not an answer. A clean sales log is.

4. The takeaway

Under £1,000 gross: relax. Over it: register, keep records, and choose your deduction intelligently — at typical second-hand margins, actual costs usually beat the flat allowance. Either way, the winning move is knowing your real numbers all year, not reconstructing them in a January panic.

This article is general information, not tax advice. For your personal situation, check GOV.UK or speak to an accountant.