Attention Side Hustlers: HMRC’s New Tax Rules Could Cost You!

Those engaged in side hustles to make some extra cash must now be aware of the new tax rules issued by the HMRC. People involved in side hustles through online platforms like Airbnb, Amazon, Facebook Marketplace, and others are being warned to file complete tax returns or face penalties.

What Are the HMRC's New Tax Rules?

HMRC has reminded everyone who earns over £1,000 from a side project or hustle to file their Self Assessment Tax Return by 5 October. This applies to those earning income from side jobs, newly self-employed individuals, and property rentals.

Previously, people earning side income from online platforms were expected to declare it. But now, to ensure that nobody under-reports their income, HMRC has required websites and apps to report users’ earnings directly to them.

If you earn over £1,000 from a side hustle and are above the personal allowance, you will need to pay based on your Income Tax band. A technical officer informed that HMRC will begin receiving data about users’ earnings from online platforms in three months. What Will Happen Now? The data HMRC will receive from online platforms will be reported by calendar year. This means it will cover more than one tax year. This could complicate determining when tax payments are due. 

Many individuals are likely to seek assistance from HMRC, but with January being a peak period leading up to the self-assessment tax return deadline, getting in touch with someone may prove challenging.

This could create confusion and, unfortunately, missed deadlines.

Conclusion

HMRC is encouraged to work with online platforms and sellers to clarify the new rules and make sure people do not inadvertently miss their filing and tax payment deadlines. Ensuring compliance with these new rules is essential, as failing to pay the correct tax can impact individuals' livelihoods and HMRC’s tax collection efforts.