Name: Swindells Chartered Accountants
Address: Wilson House, 48 Brooklyn Road, Seaford, East Sussex, BN25 2DX
Price range: ££

HMRC to enforce stricter rules on ‘side hustles’

Melanie Richardson

01/03/2024

HMRC will keep an eye on the bank accounts of millions of people who earn extra cash from side jobs. HMRC is set to keep a close eye on millions of bank accounts as part of a tax crackdown. This new rule will impact people who earn extra money from side jobs, often known as side hustles.

What is a side hustle?

A side hustle is an income stream from activity which is not an individual’s primary work. Side hustles have become more popular in recent times, as people look for ways to supplement their salary and meet the seemingly endless increases to the cost of living which has left many in dire need and crisis. However, HMRC has now introduced stricter reporting measures to ensure that side hustles are taxed correctly.

Typical examples of side hustles include selling second hand clothes online, working as a delivery driver, freelance work and even renting out a spare room in your property on websites such as Airbnb.

What are the rules?

From 1 January 2024, online platforms which facilitate transactions between buyers and sellers including Etsy, Vinted and EBay amongst others, now have to report sellers’ financial details to HMRC (should the sellers’ transactions exceed the threshold). Digital platforms are not however, required to report users with fewer than 30 sales and earnings of less than £1,000 per year, which effectively represents a trading allowance of £1,000. Anything over this threshold is liable to tax.

When will this start?

Starting in 2024 these changes aim to prevent tax evasion, whether it's intentional or not. This follows an increase in the number of people making money from side hustles in recent years. HMRC wants to ensure all this income is taxed correctly.

Who will this affect?

This is likely to affect individuals who rent out properties on Airbnb, lease their driveways, deliver food, or sell clothes and furniture online if these aren't their main jobs. If you're earning money on the side, your bank account details could be shared with HMRC to better monitor these side hustle activities.

If you have a side hustle and you have any questions about whether this will affect you do get in touch with your Swindells partner who will be able to help further.

Key questions when it comes to inheritance tax

Inheritance tax (IHT) is a complex and often misunderstood aspect of tax law that can have significant implications for your estate. The new Labour government is likely to have plans to change the rules around inheritance tax and so we in this article, we look at the current rules.

Labour’s plans to impose VAT on independent schools

As a Labour government takes office, we look at Labour’s stated intention to apply VAT to independent school fees. This initiative is part of their pledge to “recruit 6,500 new teachers in key subjects to prepare children for life, work and the future, paid for by ending tax breaks for independent schools.” They estimate the policy will raise around £1.6 billion, which is “urgently needed to improve the state school system” used by about 93% of students in the country.

Cash flow management: strategies to keep your business healthy all year round

Managing cash flow is crucial for the success and sustainability of any business, whether you’re a small start up or an established company. Proper cash flow management ensures that your business can cover its expenses, invest in growth opportunities and weather financial uncertainties. Here are some strategies to keep your business’ cash flow healthy all […]