Thousands of Irish people face shock tax bill for using popular shopping website

An Irish tax expert has warned people using a popular clothes selling app that they could face a surprise tax bill.

Many Irish people buy and sell pre-loved clothes on Depop but those selling and making money could be liable for a surprise tax bill.

Thousands don't realise the income you make could be taxable and needs to be reported to Revenue.

Claire Murphy, Tax Expert at Irish Tax Rebates offers her tax tips for Irish sellers on Depop and how you can make sure you stay on the right side of Revenue.

"While many people assume that small amounts of extra income from selling online are tax-exempt, all earnings, including those from Depop, must be reported to Revenue.

"For PAYE workers, income under €5,000 must be declared using Form 12, but once sales exceed this threshold, Form 11 is required—whether or not you have a regular job.

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"Reselling and recycling old clothes has been driven back to popularity by Gen Z and Millennials with up to 65% buying something secondhand in the past year.

"Depop might be a source for extra disposable income for some, while for others it may just be a way of getting rid of old clothes. Regardless of the intention, income is still taxable and not reporting these earnings to The Revenue can open Irish taxpayers up to sizable, and unexpected tax bills."

Claire also urgers Irish sellers to follow these easy tips to avoid big penalties on tax bills:

Keep track of your sales: Jot down every sale you make. Note the dates and amounts of each sale to make your life easier when doing your taxes.

Create a vault for your cash: If you use Revolut, set up a dedicated vault for your Depop cash. It keeps your earnings organised and shows you exactly how much you’re making.

Keep receipts and track costs: As important as it is to know what’s coming in, you need to know what’s going out. Ensure you keep track of any admin fees such as seller fees, delivery etc and keep hold of your receipts.

Get into the habit and plan: Even though Depop isn’t currently required to report your sales to Revenue in Ireland, that could change someday. Platforms like eBay and Vinted in the UK already share data with HMRC, the equivalent of Revenue in the UK. We’re already seeing similar moves in the Irish tax system with companies like Airbnb and Revolut on Revenue’s radar for reporting too. So, if you’re selling on Depop or similar platforms, it may be a smart move to get ahead of the curve start declaring your income now.

Failing to report earnings could lead to serious consequences, with Revenue increasingly cracking down on undeclared income as Gerry Scully, certified Tax Accountant at Tax Return Plus also commented:

“It’s easy to think income below €5,000 isn’t taxable, but this is a common misconception. It’s important to remember that you’re required to declare any extra income to Revenue.

“Sellers who don’t declare their side hustle earnings risk fines and interest on unpaid taxes. This will result in running up big tax bills and having a lasting impact on your finances.

“Revenue does welcome self-corrections however, which can help avoid larger penalties. If you believe those figures don’t accurately reflect your earnings, don’t hesitate to reach out to a reputable, licensed Irish Tax agent to protect yourself from potential fines.”

For more information, please visit: irishtaxrebates.ie