Am I Trading? HMRC's Badges of Trade for Resellers

Last checked against GOV.UK and HMRC: 27 October 2026 · General information, not tax advice

The short answer: HMRC doesn't use one rule to decide if you're trading. It looks at nine "badges of trade", such as whether you bought something intending to sell it at a profit, how often you sell, and whether you improved things before selling. Clearing out your own belongings usually isn't trading. Regularly buying to resell usually is, and then the £1,000 trading allowance matters.

What HMRC's badges of trade are

The badges of trade come from case law, and HMRC summarises them in its Business Income Manual (HMRC: BIM20205). HMRC says the badges "will not be present in every case", some may point one way and some the other, and the presence or absence of one badge "is unlikely, by itself, to provide a conclusive answer". The courts decide on "the overall impression" from all of them.

In practice, GOV.UK puts it more simply for online sellers: you're probably trading if you sell goods you bought intending to sell for a profit, or goods you made, including things you make as a hobby (GOV.UK).

The nine badges, with reseller examples

The middle column summarises HMRC's own wording. The examples on the right are ours, to show how each badge might look for a Vinted or eBay seller. They're illustrations, not rulings: HMRC looks at the whole picture.

Badge	What HMRC says it means (summary)	Reseller example (ours)
Profit-seeking motive	An intention to make a profit supports trading, but isn't conclusive on its own.	Buying a bundle of branded jeans for £20 to sell individually at £10 each.
Number of transactions	Systematic and repeated transactions support trading.	Listing new stock every week, compared with a one-off clear-out before a house move.
Nature of the asset	Was it something you could only benefit from by selling, or something you used or enjoyed?	Ten identical phone cases bought to sell, compared with your own coat you wore for years.
Similar trading transactions	Transactions like those of an existing trade may themselves be trading.	You already run a vintage clothing stall, and you buy more vintage pieces to sell online.
Changes to the asset	Was it repaired, modified or improved to sell more easily or for more?	Upcycling a charity-shop chest of drawers, or repairing and cleaning trainers to sell.
The way the sale was carried out	Was it sold the way a business would sell, or to raise cash in an emergency?	Professional photos, a branded shop name and regular listings, compared with selling a few things to cover an unexpected bill.
Source of finance	Was money borrowed to buy it, so it had to be sold to repay the loan?	Putting stock purchases on a credit card that you clear from your sales.
Time between buying and selling	Things bought to trade are usually, but not always, sold quickly.	Relisting a car boot find the same evening, compared with selling a lamp you've had for ten years.
How you got it	Things inherited or received as gifts are less likely to be trading stock.	Selling unwanted presents or things you inherited, compared with things you bought to sell.

Car boot sales: selling your own things vs buying to resell

HMRC says that if you're just selling unwanted personal belongings from time to time, like old toys and clothes, "whether it's online or in person", you don't usually need to tell it (HMRC: tax rules for selling things). So a car boot sale to clear out your loft is normally fine.

The other side of the car boot is where trading starts. HMRC's first example of trading is buying items from car boot sales or charity shops intending to sell them for more than you paid, and doing it regularly: "You need to tell HMRC about this money." Another of its examples is buying wholesale bundles of vintage clothing to resell individually.

The exception for your own things is valuable items: a single item or set sold for £6,000 or more may bring in Capital Gains Tax. See selling personal items on eBay.

If you're trading: what happens next

£1,000 or less gross trading income in a tax year (6 April to 5 April), across all your side hustles: covered by the trading allowance, and you usually don't need to tell HMRC.
Over £1,000: HMRC says you need to register for Self Assessment as a sole trader, by 5 October after the tax year ends (HMRC). Our reseller Self Assessment guide covers the steps.
Once registered, you can deduct either the £1,000 allowance or your real costs, like stock: see trading allowance vs expenses.

For Vinted specifically, our Vinted tax guide walks through the same rules. Platform reporting (30 sales or about £1,700) is a separate thing: it doesn't decide whether you're trading.

Budget 2026

We checked everything on this page on 27 October 2026. The Budget is on 28 October 2026, and HMRC says full details of its tax announcements will be published that day (GOV.UK: Budget 2026 tax documents). The badges of trade come from case law, but the £1,000 trading allowance and the Self Assessment rules could be affected by a Budget. We'll re-check this page after the Budget.

Quick answers

What are the badges of trade?

They're the factors HMRC uses to decide whether an activity is a trade. HMRC's manual lists nine: profit-seeking motive, number of transactions, nature of the asset, similar trading transactions, changes to the asset, the way the sale was carried out, source of finance, interval between purchase and sale, and method of acquisition.

Do you have to pay tax on car boot sales?

Selling your own unwanted belongings from time to time, online or in person, usually doesn't need to be reported to HMRC. HMRC's own example of trading is regularly buying at car boot sales or charity shops to sell for more than you paid.

Is one badge of trade enough to make me a trader?

No. HMRC says no single badge is likely to be conclusive by itself, some may point one way and some the other, and courts decide on the overall impression from all of them.

Not sure where you stand?

Use HMRC's free tool: Check if you need to tell HMRC about additional income.
Read GOV.UK's guide to telling HMRC about income from online platforms.
Speak to an accountant or tax adviser. If you're on a low income, the charity TaxAid gives free tax help.

Think you're trading? Check your £1,000. Our free checker shows where you stand against each platform's reporting rule and the £1,000 trading allowance. No sign-up, and nothing you type leaves your device.

Open the free HMRC limit checker Join the SideLedger waitlist

Sources

More guides for UK online sellers

Do You Pay Tax on Vinted? UK Rules & HMRC Limits 2026 – Own clothes vs reselling, the £1,000 allowance and the 30-sale reporting rule, in plain English.
Vinted HMRC Form & NI Number Request: What to Do – Why Vinted is asking for your National Insurance number, the end-of-year deadline, and why it doesn't mean you owe tax.
Vinted Tax Calculator UK: Free HMRC Limit Checker – Check your sales against the 30-sale / ~£1,700 reporting rule and the £1,000 allowance. It checks limits; it doesn't work out a tax bill.
eBay HMRC Reporting Threshold 2026: £1,707 or 30 Sales – What eBay counts towards £1,707, what it reports, and why a report isn't a tax bill.
Got an HMRC Letter About Vinted or eBay Sales? What to Do – A calm step-by-step: check it's genuine, work out if you were trading, and reply on time.
Free Vinted & eBay Profit Tracker Spreadsheet (UK) – A free download with tax-year tabs, profit per item and a check against the HMRC limits.
Trading Allowance vs Expenses: Which Should Resellers Use? – The £1,000 allowance or your real costs? Why resellers who track stock costs often come out ahead with expenses.
Do Resellers Need to Register for Self Assessment? – When reselling counts as trading, the £1,000 rule, and the 5 October and 31 January deadlines.
Depop HMRC Reporting: Do You Pay Tax on Depop Sales? – What Depop reports, what it asks you for, and Depop's own example of being reported but owing no tax.
Etsy UK Tax: HMRC Reporting Rules for Sellers 2026 – When Etsy reports you to HMRC, and why things you make to sell usually count as trading.
The £3,000 Side Hustle Threshold: Not in Force Yet – What was announced, what it would change, and why the £1,000 rule still applies today.
Why Is eBay Asking for My National Insurance Number? – Why eBay wants your NI number, what happens if you don't give it, and why giving it doesn't mean you owe tax.
Selling Personal Items on eBay: Do You Pay Tax? (UK) – Clear-outs vs trading, the £6,000 Capital Gains Tax rule for valuable items, and why eBay may still report you.
Facebook Marketplace & HMRC: Do They Report You? – What we could and couldn't confirm about Facebook Marketplace reporting, what Gumtree says, and why the tax rules are the same either way.

This is general information, not tax advice. Whether you owe tax depends on your circumstances. Check GOV.UK or speak to an accountant about your own situation. SideLedger is not affiliated with HMRC, Vinted, eBay or Depop.