Depop Seller Tax Guide: Do You Need to Pay Tax in the UK?

If you are selling on Depop, you might be wondering whether HMRC expects you to declare the income. The short answer is: if you are trading and your total trading income is over £1,000 in a tax year, you usually need to register for Self Assessment.

This guide explains when Depop income becomes taxable, what counts as income, what expenses you can claim, when VAT becomes relevant, and how to stay organised.

When Do Depop Sellers Need to Pay Tax?

HMRC looks at whether you are trading. If you are buying items to resell, running your Depop shop regularly, building a brand and aiming to make profit, that is likely to be treated as a trade.

If your total trading income is more than £1,000 in a tax year, you normally need to register for Self Assessment and declare the income. This £1,000 limit is called the trading allowance.

What if I am only selling my own clothes?

If you are genuinely selling your own personal possessions, such as old clothes from your wardrobe, HMRC may not treat that as trading for Income Tax. That is different from sourcing items specifically to resell.

You are more likely to be trading if you:

• Buy clothes, vintage stock or handmade materials specifically to sell.
• List items regularly and operate like a shop.
• Make consistent profits.
• Sell similar types of items repeatedly.
• Use branding, packaging, marketing or promoted listings.

HMRC has guidance on selling through online platforms, including the difference between selling personal possessions and trading.

What Counts as Depop Income?

All business income from your Depop activity should be recorded. That includes:

• Individual item sales.
• Bundle sales.
• Shipping charges collected from buyers.
• Promoted listing-related sales.
• Tips or extra payments.
• Sales made through other platforms as part of the same business.

You record your gross sales first, then deduct allowable business expenses to calculate profit.

How Much Tax Do Depop Sellers Pay?

The amount of tax you pay depends on your total income for the year, including employment income, other self-employment, rental income and anything else taxable.

Income Tax

The standard Personal Allowance for 2026/27 is £12,570. For England, Wales and Northern Ireland, Income Tax is charged at 20%, 40% and 45% depending on your total taxable income. Scotland has different Income Tax bands.

You can check the current rates on GOV.UK's Income Tax rates page.

National Insurance

Self-employed sellers may also pay National Insurance on profits. For 2026/27, Class 4 National Insurance is charged at 6% on profits between £12,570 and £50,270, then 2% above that. Class 2 is generally treated as paid for eligible self-employed people with profits above the small profits threshold, with voluntary Class 2 still relevant for some lower-profit sellers.

HMRC explains the current rules on its self-employed National Insurance page.

Example

If you earn £30,000 from employment and make £5,000 profit from Depop, your Depop profit sits on top of your employment income. In many cases, that means the Depop profit will be taxed at your marginal rate rather than using a second Personal Allowance.

What Expenses Can Depop Sellers Claim?

You do not pay tax on total sales. You pay tax on profit after allowable expenses. For Depop sellers, the most common claimable costs include:

Home office and storage

If you photograph items, pack orders, store stock and manage your shop from home, you may be able to claim part of your home costs. You can either use a reasonable actual-cost method or, if eligible, simplified working from home rates.

HMRC explains these on its simplified expenses for working from home page.

What you cannot usually claim

• Personal clothes you keep and wear yourself.
• Makeup, hair, nails or grooming costs for ordinary personal use.
• Meals while listing, photographing or packing orders.
• Fines, penalties or personal purchases.
• Items that are partly personal without adjusting the claim.

The core rule is that costs must be wholly and exclusively for business, or the business proportion must be calculated fairly. HMRC's general guidance on self-employed expenses is useful here.

When Do You Need to Register for Self Assessment?

You must register for Self Assessment by 5 October after the end of the tax year in which you first needed to file.

For example:

• The tax year runs from 6 April 2026 to 5 April 2027.
• If your Depop trading income goes over £1,000 during that year, you should register by 5 October 2027.
• Your online tax return and tax payment are usually due by 31 January 2028.

You can register through HMRC's Self Assessment registration page.

Do Depop Sellers Need to Register for VAT?

Most Depop sellers do not need to register for VAT straight away. VAT registration becomes compulsory when taxable turnover is more than £90,000 in any rolling 12-month period, or if you expect to exceed the threshold in the next 30 days alone.

This includes taxable business sales across platforms, not just Depop. If you also sell on Vinted, eBay, Etsy, Whatnot, Shopify or at markets, those sales may count too.

VAT can get complicated for fashion resellers because many sellers buy second-hand goods. The VAT margin scheme may be relevant, but it has strict record-keeping rules. Read more in our VAT for Depop sellers guide or speak to an accountant before registering voluntarily.

What Happens If You Do Not Declare Depop Income?

HMRC takes undeclared income seriously. If you should have registered and filed a return but did not, you may face penalties, interest and tax backdated to earlier years.

Late Self Assessment returns can trigger an initial £100 penalty, with additional penalties if the return remains late. HMRC explains the current rules on its Self Assessment penalties page.

Online platforms also share more seller data with tax authorities than they used to, so it is safer to keep your records clean and declare your income properly.

How to Stay on Top of Depop Tax

Keep clean records

Track sales, refunds, stock purchases, packaging, postage, fees and mileage. Keep receipts, invoices and bank statements. If you buy stock in cash, make a note of the date, amount, supplier and item type.

Separate business and personal money

A separate bank account makes it much easier to see whether the shop is profitable and to prepare your tax return.

Set money aside

A sensible starting point is to save 25% to 30% of profit for tax. If you have employment income or are a higher-rate taxpayer, you may need to save more.

Do not wait until January

Depop shops can involve lots of small sales and costs. Leaving the admin until the tax deadline makes it much harder to claim everything correctly.

Key Takeaways

• If you are trading on Depop and total trading income is over £1,000, you usually need to register for Self Assessment.
• Selling your own wardrobe occasionally is different from buying items to resell.
• Declare gross sales, then deduct allowable expenses to calculate profit.
• Common expenses include stock, Depop fees, postage, packaging, equipment, storage and accountancy fees.
• Register for Self Assessment by 5 October after the tax year you first needed to file.
• Monitor VAT once turnover approaches £90,000 across all platforms.

Ready to Get Your Depop Taxes Sorted?

At Simplr Accounting, we specialise in helping UK Depop sellers stay HMRC-compliant and keep more of what they earn.

Whether you are just starting out or scaling to serious sales, we can handle your Self Assessment, bookkeeping and tax planning so you can focus on growing your shop.