People in the United Kingdom (UK) who make money from ‘side hustles‘ will be subject to firmer tax regulations this year from the nation’s taxation authority HM Revenue & Customs (HMRC)
The new tax on additional income streams is set to come into effect from January 1st and will require large online platforms like eBay, Airbnb, and Etsy to share seller information with tax authorities. The policy change allows HMRC to more easily detect potential tax evasion from individuals making money through online side jobs and side hustles.
Under the new rules, online platforms must directly report seller data – including tax ID numbers, bank details and total sales – to HMRC by January 2025. This comprehensive reporting only applies to sellers making over £1,000 annually. Those surpassing this threshold are obligated to register as self-employed and file the proper tax paperwork.
In addition to second-hand auctions and home shares, the tax crackdown covers food delivery, freelance work, rental of parking spots or storage space, and more. The information sharing allows HMRC to cross-reference seller activity on UK and international sites to ensure proper tax compliance.
An HMRC spokesperson told the BBC, “These new rules will support our work to help online sellers get their tax right first time. They will also help us detect any deliberate non-compliance, ensuring a level playing field for all taxpayers.”
Do people in the UK have to pay tax on a side hustle?
Whether selling clothing on Vinted, selling old books on eBay or selling handmade bracelets on Etsy – if the person making the sale earns more than £1000 from their side gig in a tax year then they need to pay tax if in the UK.
To do this Brits have to register as self-employed via HMRC and submit a self-assessment tax return.
Picture: Pixabay
Image and article originally from readwrite.com. Read the original article here.