HMRC ‘couldn’t be clearer’ that there is no new side hustle tax
HMRC have issued a statement clarifying that the new reporting of data from online platforms to HMRC from January 2025, does not change people’s tax obligations.
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New rules are now in place that require online platforms to collect information on the money made by those offering accommodation, transport and personal services through platforms and to report the information to HMRC. These rules also apply to those selling goods if they make €2,000 (approximately £1,700) or more, or complete 30 or more transactions within a calendar year.
By 31 January 2025, the platforms must report information about any new users who signed up to their platform in the 2024 calendar year. The reports covering the 2025 calendar year onwards (due 31 January 2026 onwards) will be for all platform users – old and new – who fall into the criteria.
HMRC’s statement
In the statement issued by HMRC about the impact of the new rules on platform users, Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, says:
”We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due.
As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for Self Assessment.”
HMRC’s statement goes on to explain:
“The new reporting requirements for digital platforms came into effect at the start of 2024. It is not a new tax and whether people are selling personal items on eBay, renting homes out on Airbnb or delivering takeaways through Just Eat – no tax rules have changed.
Those who sold at least 30 items or earned roughly £1,700 (equivalent to €2,000), or provided a paid-for service, on a website or app in 2024 will be contacted by the digital platform in January to say their sales data and some personal information will be sent to HMRC due to new legal obligations”.
HMRC’s statement also confirms that the sharing of sales data does not automatically mean that an individual needs to complete a tax return and/or pay tax on their sales.
Who needs to complete a tax return?
If you make sales of goods or services using an online platform and are unsure if you need to complete a tax return to report the income, we have produced lots of helpful information. This includes a handy flowchart.
If you need further help to work out if you need to pay tax and/or complete a self assessment tax return, we have the following pages on our website:
- Our main page of guidance for people selling goods and services through online platforms like Etsy, Uber, Deliveroo etc. can be found in our gig economy section.
- We explain more about the OECD reporting rules on our OECD rules page.
- Recently we published some tips for people who are selling a mixture of personal items and goods as part of a trade through online platforms, to help them understand and manage their taxes.
Over the last year, we have also published several other news articles looking in more detail at the impact of the new OECD platform reporting rules on sellers. A few examples are:
- New rules for gig economy workers - your questions answered
- More ‘side hustle’ tax help
- Side hustle tax mythbuster
Remember, the new platform reporting rules do not create new tax rules for people. However, the platform reports will make it easier for HMRC to spot if people have not paid tax when they should have. The first reports for new platform users in 2024 will cover the 2024 calendar year – some of which falls in the 2023/24 UK tax year. If you need to complete a 2023/24 self assessment tax return but have not yet told HMRC – you still have time, as we explain here.
Getting help with your tax return
If you are trying to complete your tax return for the first time, we have recently published an article giving you some information about accessing, filling in and submitting a 2023/24 tax return, and providing you with some helpful tips to get you through the process.
If there are any earlier tax years that require bringing up to date, you may want to seek assistance – as we set out in our guidance. If you cannot afford to pay for a professional accountant or tax advice, TaxAid may be able to assist you with historic problems and get things right going forward.
If you need further assistance from HMRC or the tax charities but are struggling with next steps because English isn’t your first language, you can watch our translated videos (in several different languages such as Portuguese and Polish) on how to get the help you need.
Other HMRC initiatives
HMRC have worked with financial influencer Abigail Foster to produce a video about selling personal items online. This is available on X, Facebook, LinkedIn and Instagram. You should be cautious when viewing other tax related content from online influencers, particularly where the content is not produced in collaboration with HMRC and we recommend you check any information on the GOV.UK official website.
HMRC also have a carousel post on Facebook, X, Instagram and LinkedIn which will be more relevant to people selling goods and services as part of a business.
HMRC say they are working alongside online platforms to ensure sellers receive clear guidance on their tax responsibilities. If you do not think that your online platform is being helpful or you are seeing confusing or mixed messages, please let us know. Although we can’t give individual advice, it is helpful for our work to understand problems that online sellers may be facing.
