HMRC has issued a warning for millions on salaries of £50,000 or more. Self-employed and higher earners who earned £50,000 or more and claimed Child Benefit in the financial year 2023/24 will need to fill out a self-assessment by the end of the month.
Ahead of the self assessment tax deadline, Dean Butler, managing director for retail direct at Standard Life, said that tax returns were not known for “being fun”. He said: “But it’s important to understand what’s required and file it on time to avoid any penalties which can be costly – last year, HMRC collected a record £220million in late-filing fines.”
The expert said: “If you earned over £50,000 in the 2023/24 tax year and you or your partner claim Child Benefit, you have to declare this on your self-assessment tax return, or you may face a penalty.” Online sellers using platforms like eBay, Vinted, and Airbnb need to be aware of HMRC’s new reporting requirements, which come into effect at the end of January. Although no new tax rules have been introduced, digital platforms will now report sales data for those meeting certain thresholds.
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He said: “If you fail to file your return, file it after the deadline, or fail to pay your tax bill, you’ll incur a penalty. If your return is up to three months late, you’ll be charged £100, and if it’s any later then you could be charged an extra £10 a day up to £900.
“There are further penalties if your return is more than six or 12 months late. If you’re late paying your tax bill then you’ll be charged interest on late payments too. You can appeal against a penalty if you have a legitimate excuse, but it’s far less hassle to file your return on time and pay your bill in the first place!”
International Tax Advisor Andy Wood from Tax Natives said: “New rules for platforms like eBay and Vinted are coming in from January 2025 to help HMRC make sure everyone’s paying the right tax. The good news? If you’re just selling personal items here and there, there’s no need to worry – HMRC has been clear that sales of unwanted items aren’t taxable.
“But if you’re using platforms to sell goods, offer services, or make money in other ways, it’s worth knowing the tax rules. If you earn more than £1,000 before expenses in a tax year, you might need to register for Self Assessment. This could include anything from flipping items for profit to renting out your spare room on Airbnb. HMRC’s aim is fairness – they’re not targeting casual sellers, just making sure everyone who needs to pay tax does so.
“The £1,700 or 30-item threshold is simply the point where platforms report your sales data to HMRC. It doesn’t automatically mean you owe tax or need to fill out a tax return, but it’s a great reminder to check if what you’re doing counts as taxable income. If you’re unsure, getting advice from a tax expert is a smart move to stay on the right side of things.
As these changes roll out, staying informed is key. HMRC is working with platforms to give clear guidance, and you can use tools on GOV.UK to figure out if you need to register for Self Assessment. Taking action now can save you a lot of hassle later!”