It is no secret that Christmas is an expensive time, from the cost of buying presents to the seemingly never-ending stream of food that needs to be bought.<\/p>\n
<\/p>\n
Therefore, it is only natural that at this time of year, people will be beginning a side hustle to bulk up the bank balance before the most expensive season of the year commences.<\/p>\n
However, understanding the tax implications of a festive side hustle can be tricky for those who have never had to complete their own tax filings.<\/p>\n
Whether it is selling clothes on Vinted or selling homemade Christmas wreaths, income collected through a side hustle could be subject to tax.<\/p>\n
If your Christmas side hustle brings in more than \u00a31,000, you may need to register as self-employed and complete an annual Self Assessment tax return.<\/p>\n
Side hustlers who earn between \u00a31,000 and \u00a33,000 no longer need to complete a full Self Assessment tax return and can now instead report earnings through a simplified digital service.<\/p>\n
For hustlers who earn below the \u00a31,000 threshold, they will not need to pay any tax in accordance with the UK\u2019s Trading Allowance, which allows people to earn a gross of \u00a31,000 on top of typical revenue streams.<\/p>\n
On the other hand, if the side hustle earns over \u00a390,000, you may need to register the business for VAT and begin charging VAT on services.<\/p>\n
It is often the case that people with side hustles do not realise that they are liable for tax on their earnings.<\/p>\n
However, it is imperative that side hustlers realise that they are liable for tax and that there are multiple ways that HMRC can determine this.<\/p>\n
If no tax is paid ahead of the Self Assessment deadline, fines and penalties can be issued, some of which can even accrue daily.<\/p>\n
It may be the case that tax is not owed. Even so, you must still submit a Self Assessment tax return, or else you could receive a \u00a3100 fine.<\/p>\n
If you haven\u2019t paid tax owed for a side hustle over numerous years, HMRC can force repayment of arrears.<\/p>\n
When determining non-compliance, HMRC will use an automated system to flag discrepancies between bank records, declared income and lifestyle.<\/p>\n
In the worst-case scenario of large-scale tax evasion, HMRC may criminally investigate you and prosecute you accordingly.<\/p>\n
This makes speaking with an accountant when starting a side hustle all the more important.<\/p>\n
Getting in touch with an accountant is one of the best ways to mitigate issues surrounding tax when you are running a festive side hustle.<\/p>\n
We can help you to understand your tax position so that you are confident that you are acting within your level of income.<\/p>\n
For support with tax on winter side hustles, get in touch with our team.<\/p>\n","protected":false},"excerpt":{"rendered":"
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