Gig economy: Act now to check your tax position
The Low Incomes Tax Reform Group (LITRG) has published new guidance1 to help people making money through online platforms to use their ‘seller information statements’ to check their tax position and complete a January tax return if necessary.
This month, online platforms like eBay, Etsy, Vinted and Deliveroo are sending information to HMRC about the identities and sales income of certain people who use the platforms to sell goods and services. This information will cover the 2024 calendar year. A copy of the information shared by the platforms is also being sent to the platform users, in the form of ‘seller information statements’2.
As the statements will cover the 2024 calendar year, only earnings between January and March 2024 are relevant for the 2023/24 tax year. However, this can still help sellers work out their overall tax position for the year, in addition to other records they may have.
Not everyone who receives a statement will need to file a 2023/24 tax return3, and many who do may have already done so ahead of the 31 January deadline. However, LITRG is concerned that there will be some online platform sellers who have left their tax return to the last minute or only realise that they may need to complete one on receipt of the statement from the online platform. These people will need to take swift action.
To assist sellers in this position, LITRG has published new guidance that explains how they can use their seller information statements to help work out their tax position and complete a tax return if necessary. An accompanying article, focussed specifically on helping people meet the January tax return deadline, contains a worked example and sets out the steps taxpayers should take if they cannot pay what they owe.4
Meredith McCammond, Technical Officer at LITRG, said:
“The self assessment deadline is days away, and the sight of these statements could come as a shock for sellers who were unaware until now that they may need to file a tax return or pay tax on their online sales.
“Not everyone who sells online will get a statement, and not everyone who gets a statement will have a tax return to file or tax to pay. But it is important that if you receive one, you understand how the rules apply to you and the steps you need to take if you need to declare this income to HMRC.
“Although the seller information statements should not be seen as a substitute for maintaining proper business records, these statements can help you work out how much gross income you made in the 2023/24 tax year. Although they cover the 2024 calendar year, the entries are split into quarters. Only the entries for Quarter 1 (income earned between January and March 2024) should be included in your workings, alongside any other money earned earlier in the 2023/24 tax year, from April 2023 to December 2023.
“From this, you can work out whether the £1,000 trading allowance might apply which may mean you do not need to do a tax return. If your gross income is over £1,000 and you need to do a tax return, the statements are a good starting point for working out the income and expense figures you need to report in the form.”
Meredith McCammond continued:
“If you receive a seller information statement and realise you had taxable sales of more than £1,000 for the 2023/24 tax year, but have not yet registered for self assessment with HMRC, it is important that you do so as soon as possible.5
“In this situation, you will have three months from the date HMRC issues you a 2023/24 tax return to submit it and pay any tax you owe. This means you will not face late filing penalties or late payment penalties for missing the usual 31 January 2025 deadline. However, late payment interest may apply if tax is not paid by the end of this month. HMRC can charge penalties for late self assessment registration, however these might be avoided if you do not owe HMRC anything for 2023/24 at the end of this January, or you can show you have a reasonable excuse for registering late.
‘’If you are already registered for self assessment and have access to HMRC’s online tax return system, it is important to do your tax return as soon as possible.
“If you can’t pay your tax bill – don’t panic, there are things you can do. The main point is to make sure you file your tax return before the deadline to avoid getting late filing penalties, which can quickly build up the longer the return is late and may end up costing more than the tax you might have to pay.”
Notes for editors
- LITRG’s guidance can be found here.
- Seller statements may be sent to anyone who sold ‘services’ via an online platform (like driving an Uber or delivering food through Deliveroo) during the 2024 calendar year. For those who sold ‘goods’, then they may only receive a statement if their total income from the platform was over £1,700, or they made 30 or more sales transactions in the calendar year.
- The main exceptions are if someone is not trading, for example, they are selling their own unwanted personal items (note, however, that some high value personal items sold for a profit may be subject to capital gains tax), or if have total trading or miscellaneous income (before expenses are deducted) of up to £1,000 and they meet the conditions to use the Trading Allowance.
- See LITRG article published 23 January 2025, here.
- See LITRG’s guidance on Registering for self assessment
