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HMRC Launches Online Checker Tool for Side Hustle Taxes

HMRC Launches Online Checker Tool for Side Hustle Taxes

Back in January, we reported on the announcement that HMRC were implementing new rules to help identify any cases of tax evasion and non-compliance on trading activity, often referred to as a “side hustle”. HMRC now requires businesses like Depop, eBay, Etsy, Vinted, and Airbnb to share and report sales details. For more information on the new rules, please see our original blog here.

Now, nearly 12 months later, HMRC have introduced an online checker function for individuals to check whether they owe tax on their “side hustles”.

Who Might Need to Use This Checker?

Individuals who have been selling personal possessions, goods or services online, creating online content or renting out property using digital platforms can use this new tool to check whether you are required to declare any income to HMRC.

If an individual is making sales of over £1000 through their collective side hustling activities, they are required to notify HMRC by filing a self-assessment tax return. HMRC expects those involved in such ‘side hustles’ to adhere to tax reporting and payment obligations just like any other business.

You can find further guidance on trading from HMRCs Business Income Manual here.

What Information Do I Need to Complete the Check?

Before starting this check, you will need to have certain information about your income ready to hand, including:

  1. how much income you received, or expect to receive during the tax year
  2. whether this income is shared with someone else
  3. if you have other alternative sources of income to declare.

You can access the online check assessment and HMRCs subsequent guidance here.

Seeking Tax Advice

If you are unsure on your tax position it is important to seek a professional advice. Individuals should be warned against rely solely on the results provided by this checker. We advise this as it does not take into account the full overview of an individual’s tax position. For a full personal assessment on your tax obligations, a tax advisor will be able to review your individual circumstances. Furthermore, an advisor can clarify your requirements to HMRC and help to ensure on-going compliance.

Got some questions? Get in touch with our experts today at info@wttconsulting.co.uk or call us on +44 (0)20 3468 0000 for more information.

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