FROM holiday homes to selling a second-hand jumper on Vinted, a single piece of regulation is now casting a very wide net.
DAC7 is an EU tax transparency directive designed to ensure income earned through online platforms is properly declared.
The UK’s version came into force on 1 January 2024, with platforms required to submit their first reports to HMRC by 31 January 2025.
The rules require online platforms to collect and report seller information where income is earned from activities including short-term property rentals, selling goods, personal services, or hiring out vehicles and equipment.
Professional holiday-let owners sit alongside individuals selling a handful of unwanted items on platforms such as Vinted and eBay.
Disproportionate, unpaid compliance burden
Kate Allen, Owner at Kingsbridge-based Finest Stays, said it was unfair to land holiday-let businesses with the extra burden.
She added: “While its stated aim of tax fairness is hard to argue with, the reality is that DAC7 places a disproportionate, unpaid compliance burden on holiday-lettings businesses; particularly smaller operators. DAC7 reporting has driven up costs, shifted legal risk onto agencies, and introduced complex reporting obligations with no compensation.
“We are now required to collect and store sensitive tax and ID data, shoulder GDPR and cyber-security risk, and face penalties for errors often caused by homeowners themselves. This is non-revenue work: tax enforcement quietly outsourced from government to private businesses.
“Longer term, DAC7 may reduce unfair competition and improve our sector credibility. But applying the same rules to professional holiday lets and someone selling a few items on Vinted is regulatory overreach. Fairness matters, but one rule for fundamentally different activities isn’t fair.”
Farfetched and absurd
Laura Purkess, Personal Finance Expert at Investing Insiders, said many don’t know about the tax to be paid on selling on Vinted or eBay.
She continued: “The fact remains that the vast majority of people have no idea that they could potentially be liable for tax for selling stuff on eBay/Vinted, because the idea sounds farfetched and absurd.
“People have been flogging their secondhand wares at car boot and jumble sales for decades without worrying about tax implications, so selling the same items via online marketplaces for similar prices should not be treated any differently.
“At best, there should be a distinction between a casual reseller and someone who is operating full-blown secondhand shop and making a living wage out of it, perhaps with the threshold sitting around the national living wage.”
An abomination
Kundan Bhaduri, Entrepreneur, Investor and Landlord at London-based The Kushman Group, denounced the tax.
He added: “The latest DAC7 regs are an abomination. They will treat a teenager selling their Pokemon cards the same as a mega corporation. Over time, platforms now need to collect personal data, track transactions, and file annual reports to multiple tax authorities even for micro businesses run from one’s bedroom.
“Meanwhile, genuine tax avoiders will simply move their operations offshore or into cash transactions while ordinary families will face having their eBay accounts suspended for missing paperwork deadlines. This is designed to catch people whose only crime was decluttering their wardrobes without filing the correct forms.”
Colette Mason, Author & AI Consultant at London-based Clever Clogs AI, worries about the environmental impact.
She said: “How can the government want us to be environmentally responsible and make sustainable choices in our purchasing habits, then throw a grenade into the second-hand marketplace like this?
“If the state wants more viable goods going into landfill, this draconian measure is a fantastic way to achieve it.”
Photo by Donatella D’Anniballe on Unsplash.
