MoneyMagpie Editor and financial expert Vicky Parry warns those in receipt of Universal Credit about the rules for selling your stuff
08:00, 11 Jan 2026
Sometimes we get exactly what we want for Christmas - and sometimes it’s definitely not what was on our list for Santa.
Selling unwanted gifts and items cluttering your home is a great way to make extra money, especially in January when budgets are tight for most of us following the festive season.
But if you receive means-tested benefits like Universal Credit there may be some rules you need to be aware of when it comes to making money from selling your stuff.
Universal Credit income rules
When you receive Universal Credit, how much you get depends on your other income and circumstances. Some income will not count towards your household ‘earnings’.
While some benefits like Personal Independence Payment are not considered earnings, others like Employment and Support Allowance are (which reduces your Universal Credit entitlement).
If you’re self-employed, you need to report your business income and expenses every Universal Credit period. Any loss from one period is rolled to the following one. If you have a salaried job, your income is automatically reported by your employer to HMRC.
There are some types of income called unearned income. This is determined as regular payments from a source not related to your employment, such as a private pension.
While your earnings from employment reduce your Universal Credit by 55p for every £1 earned (over any Work Allowance, if you have one), unearned income reduces it £1 for every £1.
If you have savings or capital your UC entitlement reduces by £4.35 for every £250 you hold between £6000 and £16,000. This is the savings threshold and gets really important to know about when you’re thinking about raising cash by selling your stuff.
When you need to declare income
With all of that in mind, does selling your stuff count as income for Universal Credit?
The short answer is no. If you are selling a few items that you own, whether you originally bought them or they are unwanted gifts, you don’t need to declare the income.
However, do note that if you use websites like Vinted or eBay to sell items online to make money, earnings over £1,740 or make over 30 sales in the year these sites are obligated to report this to HMRC.
But in most cases, if you are just selling unwanted items in your home, then you would not need to pay tax on this. Lots of people turn to buying things to sell online for extra part-time cash. This is when you would need to declare that income, as it is a business.
If this is your business model plan, you can turn over £1,000 a year under the Trading Allowance before you must register as self-employed and complete a Self Assessment each year, and you must register your new self-employed status with Universal Credit, too. Anything you earn from selling items you have bought with the intention of selling on must be declared.
If you’re selling personal items once or twice a year, the HMRC reporting should not be a concern. Keep a paper trail to make sure you can prove you haven’t set up a side hustle business.
Keep a paper trail
A clear paper trail also helps to prove you have not deliberately deprived yourself of capital (money) to continue to be eligible for the same level of benefits.
This includes keeping records of what you did with the money raised from selling your stuff, if it was a significant amount or an unusual transaction.
For example, if you sell a few old gadgets or some jewellery and raise £2000, but need to use this money to pay off your credit card to remove debt, this is generally not considered deprivation of capital.
If you sold your old car for £6000 and spent the money on buying a new one, that is also not considered deprivation if the car is necessary and reasonable. The assessment of reasonable is subjective, but an example might be that you don’t have access to other cars and need one of your own.
However, if you raise £2000 and that takes you over the UC savings threshold of £6000 and you give the £2000 to someone else as a gift to make sure you don’t lose your maximum UC entitlement, that’s deprivation of capital.
Making money in other ways
As well as selling your stuff, you can make money to top up your income in many other ways. For example, you could switch bank accounts to raise up to £300 from a switching incentive. Or, you might get a bonus up to £600 from your Help to Save savings account.
Money like this, where you have not exchanged your time to work for money, is not considered earnings for Universal Credit. However, it is counted as capital, so it must be declared if it takes you anywhere above the £6000 savings threshold.
Refunds and cashback aren’t considered income or earnings for Universal Credit, either. Cashback is considered a discount and refunds are your own cash owed back to you. However, as with other income, if it takes you over the savings threshold, you need to report the change.
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