{"id":5506,"date":"2024-01-03T12:08:25","date_gmt":"2024-01-03T12:08:25","guid":{"rendered":"https:\/\/www.bainesjewitt.co.uk\/blog\/?p=5506"},"modified":"2024-01-03T12:08:26","modified_gmt":"2024-01-03T12:08:26","slug":"tightening-the-reins-on-side-hustles-navigating-hmrcs-new-powers","status":"publish","type":"post","link":"https:\/\/www.bainesjewitt.co.uk\/blog\/tightening-the-reins-on-side-hustles-navigating-hmrcs-new-powers\/","title":{"rendered":"Tightening the reins on \u2018side hustles\u2019 \u2013 Navigating HMRC\u2019s new powers"},"content":{"rendered":"<p>HM Revenue &amp; Customs (HMRC) is now using new powers granted to them by the Government to target a key area of tax evasion \u2013 online traders.<!--more--><\/p>\n<p>Individuals selling on platforms like eBay, Vinted, or Depop must now be vigilant about their sales and income generated from them and what is reported to the tax authority.<\/p>\n<p>This is because HMRC now mandates these platforms to track and report sellers&#8217; earnings. Operators may incur significant fines for non-compliance.<\/p>\n<p>Effective from 1 January 2024, these rules also encompass short-term rental platforms like Airbnb.<\/p>\n<p>With online selling being a popular means of supplementing income, these new rules could impact many if their earnings exceed a certain threshold.<\/p>\n<p><strong>Understanding the \u00a31,000 allowance<\/strong><\/p>\n<p>The \u00a31,000 allowance applies to employed individuals with an additional income source. This extra income often comes from irregular and casual activities, such as:<\/p>\n<ul>\n<li>Freelance writing or designing<\/li>\n<li>Crafting and selling handmade items<\/li>\n<li>Pet or house-sitting<\/li>\n<li>Tutoring<\/li>\n<\/ul>\n<p>As these jobs are usually casual and might involve cash payments, many overlook the need to pay tax on these earnings, especially at the outset.<\/p>\n<p>In the UK, there&#8217;s a \u00a31,000 tax-free allowance for income beyond one&#8217;s primary job. Beyond this, you must register as self-employed and file a Self-Assessment tax return to declare your additional income and determine your tax liability.<\/p>\n<p><strong>Navigating Self-Assessment<\/strong><\/p>\n<p>Self-Assessment is HMRC&#8217;s method for collecting income tax from those not using the PAYE system.<\/p>\n<p>You need to submit this by 31 January following the tax year it pertains to, which ends on 5 April.<\/p>\n<p>You&#8217;re also required to settle any tax due by 31 January of the subsequent year. For instance, for the fiscal year from 6 April 2023 to 5 April 2024, you must file your return and pay any tax by 31 January 2025.<\/p>\n<p>Be aware that even if you do pay tax via PAYE, you will also need to submit a tax return if you have additional income outside of salaried pay, such as a \u2018side hustle\u2019.<\/p>\n<p>Failing to submit on time can lead to a minimum fine of \u00a3100, escalating for delays beyond three months.<\/p>\n<p><strong>Implications of the new regulations<\/strong><\/p>\n<p>For some, these changes won&#8217;t impact their earnings if they remain below the \u00a31,000 limit and those regularly earning well above this threshold are likely aware and consistently submit a Self-Assessment.<\/p>\n<p>However, those with earnings in-between should monitor their income carefully to see if it crosses the threshold.<\/p>\n<p>Many individuals with \u2018side hustles\u2019 unknowingly omit e-trading income from their tax declarations or fail to submit a tax return altogether.<\/p>\n<p>Therefore, all e-traders and side hustle participants should meticulously record their sales and earnings. This practice will help determine whether you need to pay tax on your income.<\/p>\n<p><strong>For detailed advice and guidance on the latest tax rules, please contact our expert team today.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>HM Revenue &amp; Customs (HMRC) is now using new powers granted to them by the Government to target a key area of tax evasion \u2013 online traders.<\/p>\n","protected":false},"author":2,"featured_media":5508,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[24,125,30,75,87,25,4,26,7],"tags":[],"_links":{"self":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5506"}],"collection":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/comments?post=5506"}],"version-history":[{"count":1,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5506\/revisions"}],"predecessor-version":[{"id":5507,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/posts\/5506\/revisions\/5507"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media\/5508"}],"wp:attachment":[{"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/media?parent=5506"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/categories?post=5506"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.bainesjewitt.co.uk\/blog\/wp-json\/wp\/v2\/tags?post=5506"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}