Etsy Tax Calculator
Check your actual take-home profit after Etsy fees, listing costs, and shipping. See if you need to register as a sole trader with HMRC and how much tax you can expect to pay.
Etsy & HMRC Rules
Etsy is now legally required to share seller data with HMRC. This affects you if you pass either of these thresholds in a calendar year:
- You sell 30 or more items.
- Your total sales revenue exceeds €2,000 (approx £1,700).
Handmade vs. Vintage
If you make items to sell (Handmade), you are "trading" and must pay tax on profits over £1,000. If you resell vintage items you bought specifically to resell, you are also trading.
Expenses & Fees
Etsy fees can be significant. When calculating your tax, remember to deduct:
- Listing fees ($0.20 per item)
- Transaction fees (6.5%)
- Payment processing fees
- Material costs and shipping
Tip: If your total expenses are low (under £1,000), use the Trading Allowance instead to save money.
Common Etsy Tax Questions
1Do I need to register as a Sole Trader?
You must register as a Sole Trader if your total trading income (from Etsy and other side hustles) is over £1,000 in a tax year. If you earn less than £1,000, you are covered by the Trading Allowance and don't need to register.
2What about VAT?
You only need to register for VAT if your taxable turnover exceeds £90,000 (rolling 12-month period). Most small Etsy shops do not need to worry about VAT registration immediately.
Last updated: December 2025