There’s an important update for those of us juggling side hustles alongside our regular jobs. HMRC has rolled out a significant change, effective from January 1 2024, focusing on popular platforms like Airbnb, Fiverr, Upwork, Uber, Deliveroo, and Etsy. What does this mean for you? Let’s dive in.
Increased Transparency and Reporting
In a bid to clamp down on tax avoidance, HMRC has instructed these platforms to meticulously record and report the earnings of individuals using their services. This move forms part of a broader strategy to ensure fair tax contributions from those supplementing their income through side hustles, freelancing, or self-employment.
Who Will Be Affected?
If your side hustle income exceeds £1,000 in the tax year, it’s time to register as self-employed and report this income to HMRC. This isn’t new, but what’s changed is the level of scrutiny and data exchange between digital platforms and the tax office.
For those already adhering to tax regulations, this shouldn’t cause any direct impact. The expectation remains the same: declare your side income and pay the due taxes. However, if you’ve been less than forthright about your earnings, it’s time to pay attention. Discrepancies between the income reported by digital platforms and your tax returns will be more easily spotted by HMRC, potentially triggering investigations.
HMRC’s Investment in Compliance
HMRC is not taking this lightly. With an investment of nearly £37 million and the enlistment of 24 full-time staff, they are gearing up to enforce these measures rigorously. The goal? To detect and tackle tax evasion more effectively.
What This Means for You
As accountancy professionals, we’re here to guide you through these changes. Whether you’re already declaring your side income or need advice on becoming compliant, we can help. Transparency with HMRC is more crucial than ever, and we’re here to ensure you navigate these regulations smoothly.
Remember, staying ahead of your tax obligations not only keeps you out of trouble but also provides peace of mind. If you have any questions or need assistance, feel free to reach out to us.