Prepare for HMRC Side Hustle Checks: Essential Tips for Your January Tax Returns

## Expert Explains How to Prepare for the HMRC ‘Side Hustle Check’ Which Impacts Tax Returns This January *Source: [London Loves Business](https://londonlovesbusiness.com/?p=188281)* ### Introduction to the New HMRC Regulations The rise of side businesses has prompted significant changes in tax regulations effective January 2025. The HMRC's new rules require online platforms to report transaction data regularly, aiming to enhance tracking of income for individuals and micro-businesses. ### Who is Affected by the New Guidelines? - **Threshold for Reporting**: If you earn **over £1,000 annually** through online goods or services, you will need to declare this on your tax return. - **Exemptions**: Selling second-hand items without making a profit remains tax-free. - **Example 1**: A person selling clothes originally bought at a loss does not owe taxes. - **Example 2**: Reselling charity shop finds for profit requires tax declaration. ### Key Takeaways for Side Hustlers 1. **Selling Personal Items**: Individuals can continue selling personal items online up to **£6,000** without tax liabilities. 2. **Profit Declaration Requirement**: If profit exceeds **£1,000**, this must be declared in a self-assessment. 3. **Timely Submission**: Ensure tax returns are submitted by **January 31st**, or risk penalties for late filing. 4. **Consider Insurance**: Legal expenses insurance may protect against potential HMRC tax investigations. 5. **Expenses Matter**: Claim allowable expenses to lower taxable income, including costs related to your side hustle. ### Conclusion Understand the implications of the new HMRC tax regulations for side hustles to ensure compliance and avoid unnecessary tax liabilities. For more detailed guidance, visit the [HMRC website](https://www.gov.uk/government/publications/selling-online-and-paying-taxes/selling-online-and-paying-taxes-information-sheet).