eBay HMRC Reporting 2026: What UK Sellers Need to Know

If you sell on eBay in the UK, HMRC receives your transaction data directly from eBay starting January 2025. This changes how you report eBay income — and the difference between what eBay reports and what you owe tax on can be significant.

What HMRC now sees

eBay reports to HMRC for all UK sellers who meet either threshold:

• 30+ transactions in a calendar year, or
• £2,000+ in total sales value

This is part of the OECD's DAC7 rules that platforms across Europe must follow. eBay sends HMRC a summary of your gross sales — the total amount buyers paid, including:

• Item sale prices
• Postage paid by buyers
• VAT collected from buyers

HMRC receives this data regardless of whether you file a tax return. If the data doesn't match your return, you'll hear about it.

The reporting trap

eBay reports your gross sales — the total amount buyers paid. But your tax liability is based on your profit, not your revenue. The gap between these two numbers is where mistakes happen.

Here's what eBay includes in what they report:

• Gross proceeds: total amount buyers paid
• Number of transactions
• Date and value of each payout

Here's what eBay does not report to HMRC — and what you must account for yourself:

• eBay fees (final value fees, promoted listing fees, store subscription fees)
• Postage costs
• Cost of goods sold
• Refunds issued
• Returns and chargebacks

If HMRC sees £50,000 in eBay sales and you declare £25,000 profit after legitimate deductions, that raises no flags as long as your return explains the difference. But if you simply record the gross payout as income without tracking deductibles, HMRC's data and your return won't match.

Cash basis vs accrual — plus the payout problem

Most UK eBay sellers use cash basis accounting unless they're VAT-registered. In cash basis, you record income when money hits your bank account, not when the sale happens. Accrual accounting records income at the point of sale.

eBay's payout model complicates both:

• In cash basis: the income date is the payout date (when money arrives). But eBay's payout is net of fees — so you need to gross it up.
• In accrual basis: the income date is the sale date. But your bank statement shows the payout, not individual sales.
• HMRC's data shows gross sales by transaction date — not your payout dates.

This mismatch means your bank records, your accounting software, and HMRC's data all show different numbers on different dates unless you reconcile properly.

What eBay data HMRC can access

Under DAC7, eBay reports to HMRC annually by January of the following year. The standard fields per seller are:

• Identity details — name, address, date of birth, NI number or UTR
• Financial accounts — sort code and account number for your payout bank account
• Transaction data — total gross sales, number of transactions, paid value
• Consideration — the total amount paid to you, either on the date of sale or the date of payout depending on how eBay categorises it

eBay also shares data with other EU tax authorities if you sell cross-border.

What actually gets you in trouble

Three scenarios cause HMRC to open an inquiry:

1. You only record the payout Recording £1,000 payouts as £1,000 income looks clean to you. But to HMRC, your gross sales were £1,200, and it looks like you're hiding £200. The £200 in fees wasn't income — but you haven't recorded it as expenses either. HMRC's data says £1,200. Your return says £1,000. That mismatch triggers questions.

2. You use the wrong date If HMRC sees eBay reported sales in February 2025 but your return puts that income in March 2025 (because the payout arrived in March), it can look like an omission. This is fine with a correct cash basis note — but without it, expect a follow-up.

3. You ignore eBay sales entirely Some sellers still treat eBay as a hobby. HMRC doesn't distinguish hobby sellers from businesses. If you meet the £1,000 trading allowance, you're exempt. Above that, you need to declare.

How to set up eBay accounting correctly for 2025-26

The setup needed:

1. Record every eBay sale as an individual invoice in your accounting software
2. Record every fee as a separate expense
3. Date invoices and expenses correctly for your accounting method
4. Match bank payouts against aggregated invoices
5. Keep records that reconcile to the gross sales figure HMRC received from eBay

How TransactionMerge helps

TransactionMerge connects eBay and FreeAgent via their APIs and handles the data synchronisation automatically. Every sale becomes an invoice. Every fee becomes a bill. Every payout is reconciled against the correct invoices.

The result is FreeAgent data that matches reality, reconcilable to your bank statements, and consistent with what HMRC received from eBay.

Join the beta — it's free →