The Low Incomes Tax Reform Group has reassured those selling goods and services online that they won’t be subject to a new “side hustle tax”, despite information online in the past few days suggesting otherwise.
While there are new rules from 1 January 2024, these simply mean online platforms, such as Ebay, Vinted, Uber and Deliveroo, will have to collect and send information to HMRC. They do not create any new tax obligations for individuals.
From 1 January 2024, new rules apply which require UK-based online platforms to collect information about most people who make money through their platforms and then, from 1 January 2025, to send this information to both HMRC and the individual themselves. However, these new rules do not create any new tax obligations for individuals and the existing rules – about what platform income needs to be declared and who needs to register for a self-assessment tax return – have not changed.
Victoria Todd, Head of LITRG said: people selling unwanted personal items such as their children’s old clothes or toys are not likely to be ‘trading’.2Therefore, 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”.
The data collected by platforms will be sent to both HMRC and the individual themselves from 1 January 2025.
