HMRC Urges Action for Individuals Earning £1,000 or More from Side Hustles

HMRC Warns: Declare Earnings Over £1,000 From Side Hustles

Source: Daily Star

Understanding Tax Obligations for Side Hustles

The HMRC has issued a warning to individuals earning over £1,000 annually from side hustles such as online selling, dog walking, or babysitting. A new official guide has been released to help people understand their tax return responsibilities and the necessity of filling out a self-assessment tax return.

Key Income Reporting Requirements

• If you make over £6,000 from a single sale (e.g., artwork, jewelry), you may owe Capital Gains Tax on profits.
• Income from online platforms like eBay or services like tutoring must be reported even if it doesn’t trigger a tax liability.
• Income can include money, gifts, or services from selling items, providing services, online content creation, or renting space.

Online Marketplace Reporting

Many online platforms (e.g., eBay, Vinted, Airbnb) will provide the HMRC with data on users' earnings, leading to increased scrutiny on total reported income.

Sales of Personal Possessions

• Sales under £6,000 typically do not incur income tax.
• If selling possessions collectively valued over £6,000, this may lead to Capital Gains Tax liability.

Recognizing "Trader" Status

Consistent sellers, particularly those purchasing items specifically for resale, may be categorized as "traders," necessitating tax return declarations.

Informing HMRC About Side Hustle Income

• Those earning from gardening, repairs, dog walking, or similar services should report this income.
• Content creators should also be aware that income generated from social media or online content may be taxable.
• Renting property, even short-term rentals via platforms like Airbnb, falls under these income rules as well.

For Further Guidance

For clarity on whether you need to file a tax return, the HMRC has an online tool available to assist users in assessing their income obligations: here.