Expected boom in exempt Facebook Marketplace as UK HMRC side hustle tax hits other platforms

Facebook Marketplace could become the go-to digital platform when it comes to second-hand purchases ahead of Vinted and Depop, according to research from consumer research platform GWI, after new UK tax rules came in at the turn of the year that mean sellers making more than £1,700 a year – roughly £140 a month – will now be taxed.

The UK HMRC tax authority crackdown on second-hand ‘side hustles’ comes as government tries to stretch its remit into the online world as much as it already penetrates bricks and mortar retail.

According to Matt Smith, Trends Manager at GWI: “As one of the only major platforms not expected to hand over financial details of sellers to HMRC, our insights team suggest Facebook Marketplace is therefore likely to see a boom in users in the year ahead.”

eBay remains the undisputed champion in the UK second-hand market, with 54% of Brits using it but other lesser players like Vinted could be massively impacted, according to GWI’s latest research, which comes from a new analysis of its Core flagship survey that regularly studies online audiences every quarter and its GWI Zeitgeist monthly research that zeroes in topical matters. The latter’s July 2023 survey informs GWI’s analysis, alongside the GWI Core Q3 dataset that examines 10,014 consumer preferences among the 16-64 age group. Key findings include:

Over a quarter (27%) of UK shoppers are now using the Facebook Marketplace platform to purchase pre-owned items,
This make it already more popular than second-hand and vintage heavyweights, Vinted (21%) and Depop (5%) in the second-hand marketplace. Even eBay, with its 54% UK usage in this field may feel the impact of Facebook Marketplace’s exemption from the new tax – if nothing is done about it before enforcement action and reporting obligations start on 1 January 2025.

The shift to thrifting
Thrifting has become increasingly popular in recent years, with almost a quarter (23%) of UK consumers telling GWI they have purchased a second-hand product on at least a monthly basis. In addition to this, 15% say they’ve bought a pre-owned item in the last week – a 7% rise since 2021.

The findings suggest that this rising trend has been accelerated by the cost-of-living crisis, as consumers search for better value products. More than half (55%) of shoppers say price is the key reason for buying second-hand, far higher than those who do so for sustainability reasons (8%).

The research also identifies the most popular second-hand purchase categories, with clothing accounting for almost half (45%), followed by: