Misinformation around tax on ‘side hustles’
It was widely and incorrectly reported last week (w/c 8 Jan), that new reporting rules for digital platforms was a new tax on ‘side hustles’. This misinformation was then amplified across social media, causing many individuals to unnecessarily worry that they could end up with a tax bill.
The changes introduced from 1 January 2024, now require digital platforms* to make annual reports to HMRC about those who sells goods or services through them.
There is, however, NO new tax on ‘side hustles’ (and no plans to introduce one). The platform reporting rules will provide a significant amount of extra information to HMRC, but there is no change to the underlying rules as to when individuals selling online are subject to tax.
In an attempt to dispel the myths about the new ‘side hustle tax’ and reassure sellers, HMRC have published a selling online and paying taxes information sheet on their own website.
If you have any worries or concerns about tax or the implications of selling and trading online, please get in touch.
*a digital platform is any website or app that facilitates transactions between sellers and their customers. This can include individuals selling goods on eBay, Etsy, Vinted etc. but also those providing services or letting out property.