New UK tax rules on side hustles like eBay and Vinted may lead to ‘nasty surprises’
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Sites have until end of the month to tell HMRC how much money users have made but confusion surrounds system. A push by HMRC to uncover details of how much people are earning from selling goods and services online in “side hustles” could cause confusion because of the way the UK’s tax system operates, a charity has warned.
Sites such as eBay, Vinted and Airbnb have until the end of this month to tell HMRC about the amount of money some users made in 2024, details that may lead to the sellers having to pay more tax. But because the UK tax year runs over a different period from the details being reported to HMRC, a charity has warned that people might record the wrong details in their tax returns. The Low Incomes Tax Reforms Group (LITRG), a charity, said that more people might now have to file tax returns, but using information they find hard to manage. The new push to uncover how much people are earning online is an international initiative by the Organisation for Economic Co-operation and Development (OECD), with reporting dates of January to December.
The UK tax year runs from April to April, which means that the figures filed to HMRC by the platforms will cover a different period. The LITRG says it is worried that online traders will use incorrect figures in their tax return. Meredith McCammond, a technical officer with the LITRG, said that just one quarter of the tax data that people will receive – from January to March 2024 – will be relevant to people filling out a tax return this month. This happens at the busiest time of year for HMRC, she says, and it may be harder for the many people who will be doing a tax return for the first time to get help.
