Those selling goods and services online might find themselves wondering how HMRC’s new ‘side hustle tax’ will affect them.
The Low Incomes Tax Reform Group (LITRG) is reassuring people that the new rules, which came into force on the 1st of January 2024, are unlikely to affect them, but to check its detailed Q&A guidance for help if they have concerns.
The new rules mean that online platforms, such as eBay, Vinted, Uber and Deliveroo, will have to collect and send information to both HMRC and the individual by the 31st of January 2025.
Victoria Todd, Head of LITRG, said, “We understand there is a lot of worry among people who sell via online platforms about the changes, including for those who sell personal items they no longer want or to clear space in their home.
“However, we want to reassure sellers that there is no new ‘side hustle tax’ and no changes to the tax rules about what income needs to be declared to HMRC or when it needs to be declared.
“In particular, people selling unwanted personal items such as their children’s old clothes or toys are not likely to be ‘trading’. Therefore, even if it is a significant amount, any money they make is generally not taxable.
“The new rules have caused a great deal of confusion, but they simply mean that HMRC are receiving more information from online platforms than they were before. If you are following existing rules and declaring your income as required, then you don’t need to worry or do anything differently.”
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