HMRC to enforce stricter rules on ‘side hustles’

Melanie Richardson


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.

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