Important changes for side hustle earners in the UK from January 2024
The key stuff you need to know
Sonia Lambert
Last Update 9 months ago
There are some important changes affecting side income earners in the UK as of January 1st, 2024, but it's important to clarify that they're not actually "new taxes" on side hustles. Here's the key stuff to know:
Increased transparency:
• Platform reporting:
UK-based online platforms like Airbnb, Uber, Etsy, etc., are now required to collect and report information about sellers' earnings to HMRC (Her Majesty's Revenue & Customs). This includes the total amount earned, fees deducted, and number of transactions.
• Individual copies:
Platforms must also provide sellers with a copy of the information they sent to HMRC, promoting transparency and helping individuals file accurate tax returns.
No changes to tax obligations:
• Threshold remains:
The £1,000 trading allowance for individuals selling goods or services still applies. If your side hustle earnings exceed this, you must declare them to HMRC and pay tax.
• Self-assessment still required:
If your taxable income (including your main job and side hustle) exceeds £12,500 per year, you'll still need to register for Self Assessment and file a tax return.
Key things to remember:
• These changes are mainly about improving HMRC's visibility of income from the gig economy, not creating new tax burdens.
• If you haven't been declaring your side hustle income accurately in the past, it's best to come clean soon to avoid potential penalties.
• HMRC has resources available to help you understand your tax obligations and comply with the new rules.
Here are some helpful resources:
• HMRC website:
https://www.gov.uk/government/organisations/hm-revenue-customs
• GOV.UK information on digital platform reporting: https://www.gov.uk/government/collections/agent-update
• TaxAid explainer on the "Side Hustle Tax": https://taxaid.org.uk/the-side-hustle-tax-explained