With the UK economy drifting into recession, it only makes sense that people are looking to find new ways to make a little extra cash. Sites like Etsy and Ebay are extremely popular, and more and more people are finding ways to turn their hobbies, skills or even just unwanted junk into money.

The thing is, not everyone wants to make a business out of selling stuff online. Sometimes, all you need is a few quid to tide you over. Setting up an online seller account with a specialist auction site or digital marketplace might be more hassle than you need. Then there are the fees to consider. Chances are, a decent chunk of your asking price is getting swallowed up by the site you’re selling on.

That’s where social media comes in. Selling through Facebook, for example, could be a pretty good option if you’re just getting rid of some unneeded stuff. It doesn’t take much effort to do – and most importantly, it doesn’t cost you anything to do it. Here’s how it works.

Cash for your clutter

Suppose you’re getting rid of some clutter from your home. There’s nothing wrong with it, you just don’t want or need it any more. Maybe your kid’s outgrown their bike, for instance. You’ve never sold anything online and you’re not expecting to make a habit of it, so eBay looks like a faff. Instead, you hop on Facebook and click on the Marketplace link.

Within a few minutes you’ve created a listing. Alternatively, you find a Facebook Group that’s either local to you or relevant to what you’re selling and, assuming the group’s rules allow it, make your pitch there. If there’s an interested buyer in your area, you could be looking at a quick sale and cash in your hand.

Be careful discussing financial information online

Obviously, you’ve got to be a bit cautious whenever you’re discussing your finances and personal details online. Don’t go throwing your address and banking information up on an open forum, for example. If you’re making a deal with a Facebook user, at the very least you should sort out the specifics in a private message.

A lot of people recommend insisting on cash wherever possible, along with checking into the buyer’s profile to get a feel for whether they’re reliable or not. If you’re using Facebook Marketplace, things are usually a little less fast-and-loose. Buyers can get in touch with you through the listing you posted, but it’s still a good idea to check them out a bit before committing yourself. For in-person sales, don’t be too quick to give a stranger your address, either. Consider meeting up somewhere a bit more neutral and public.

When you need to pay tax on your online earnings.

The other thing to be careful about, as always, is keeping on the right side of the taxman. Generally speaking, HMRC doesn’t really care what you do with your unwanted stuff. That’s why jumble sales and boot fairs exist. However, if you end up doing a lot of online selling, you could easily find yourself running a business in the taxman’s eyes. #

The tax rules allow you to make £1,000 in a year from things like selling online, without paying any tax on the income. If you’re making more than this, the odds are good that HMRC will be expecting a Self Assessment tax return from you to account for the earnings. Getting caught in the taxman’s sights is no fun at all, so never ignore a letter asking you to file a tax return and don’t wait for HMRC to catch you before doing the paperwork.

Most importantly, get in touch with RIFT if you’re not 100% sure where you stand and what’s required of you. Our Self Assessment specialists will keep you in HMRC’s good books, and make sure you never lose out.

RIFT are the UK's leading tax experts who've been claiming tax refunds and filing tax returns since 1999.