HMRC has issued a warning for anyone who has landed a £1,000 payslip in the past year. HMRC, the Labour Party government’s tax department, has warned UK households over the need to register for the upcoming self assessment.
“You might need to do a tax return if you: Have earned more than £1,000 through a side-hustle, are a self-employed delivery driver/rider, rent out a property, create online content. Check if you need to register,” HMRC has advised.
If you’re occasionally selling personal possessions via an online marketplace, perhaps old vinyl records or football programmes on eBay, clothes on Vinted or other unwanted things from your loft or garage at car boot sales, no tax is payable. You’re just selling off your personal possessions.
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However, if you’re regularly buying things to sell on for a profit or you’re buying materials to make things (eg greetings cards) to sell for a profit, you’re trading and tax may be payable. The same is true if you’re selling your professional services regularly, where income can also be taxable over certain thresholds.
Most people earning taxable side-hustle income pay tax via Self Assessment, after registering as a “sole trader” (rather than setting up a limited company). If you haven’t done this before, you must register before 5 October following the end of the tax year in which you earned taxable side-hustle income.
The UK tax year runs from 6 April until the following 5 April. If you don’t register in time, you can be fined. This may include money you earn from things like selling things, for example at car boot sales or auctions, or online, doing casual jobs such as gardening, food delivery or babysitting or charging other people for using your equipment or tools.
It could even mean renting out property or part of your home, including for holidays (for example, through an agency or online) or creating content online, for example on social media.