Are you earning extra income from a side activity of selling goods, selling time-based services, selling transport services (e.g. taxi/delivery services) or renting a property (e.g. short term lets)? Are you selling ‘your side hustle’ through an online marketplace? Currently anyone who earns less than £1,000 per year (before expenses) as a result of these activities may be covered by the £1,000 trading and/or property allowance so don’t have to report this income to HMRC.
However, be aware that the new rules come into effect from 1st Jan 2024 where the digital platforms such as Ebay, Airbnb, Uber, Deliveroo, Etsy, Vinted, Just Eat, etc are now obliged to collect, verify and report information to HMRC on the seller. The first reporting year for the platforms is calendar year 2024 and this will be reported by 31 Jan 2025 to HMRC. The name, address, tax identification number or place of birth, business registration number, date of birth, income transaction information will be submitted. HMRC will be able to share this UK information with other tax authorities that have also signed up to introducing these new rules.
Certain sellers are excluded from these reporting rules e.g. the online platforms will not have to share data of sellers who sell goods and have fewer than 30 transactions and for which the total consideration does not exceed €2,000 (£1,735) during the reportable period. This exclusion does not apply to the renting of property - for the rental of property – only larger renters are excluded, i.e. sellers that rent property through the platform more than 2,000 times in a reportable period.
Please note that whilst the UK rules will apply from 1st January 2024, HMRC have the power to request information for prior years from these online platforms.
Ireland - Also to note that these rules came into operation one year earlier in Ireland for calendar year 2023.
If you need to check should you be filing a tax return – our F&F tax team are happy to help.