HMRC clarifies implications of new ‘side-hustle tax’ for eBay and Vinted users
Online sellers and renters utilising platforms like eBay, Vinted, and Airbnb have received clarifications from HMRC regarding upcoming changes in legislation starting from next month. Online platforms will commence sharing sales data with HMRC from January 2025, but the tax authority emphasises that ‘nothing has changed for online sellers’. Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, stated, “We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due. As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for Self Assessment.”
The new reporting regulations for digital platforms were enforced at the beginning of 2024. It is not a novel tax, and there have been no alterations to tax rules for individuals selling personal items on platforms like eBay, renting properties on Airbnb, or providing services through platforms like Just Eat. Those who have sold a minimum of 30 items, earned around £1,700 (€2,000 equivalent), or offered a paid service on a website or app in 2024 will be contacted by the platform in January. They will be informed that their sales data along with some personal information will be forwarded to HMRC due to new legal obligations.
The sharing of sales data does not automatically necessitate the completion of a tax return. However, individuals who may be required to register for Self Assessment and pay tax include those who purchase goods for resale, produce items with the intent of selling them for profit, offer services through digital platforms (such as delivery services or holiday home rentals), and generate a total income surpassing £1,000 before deducting expenses in any tax year.
For those uncertain about filing a Self Assessment tax return for the 2023 to 2024 tax year, they can verify on GOV.UK. New Self Assessment registrants can sign up on GOV.UK. HMRC, in collaboration with online platforms, is committed to providing clear guidance to sellers regarding their tax obligations.
Insights and Summary:
The article sheds light on clarifications provided by HMRC regarding the forthcoming ‘side-hustle tax’ implications for users of online platforms like eBay and Vinted. It emphasises that the changes in legislation do not signify a new tax but rather new reporting requirements for digital platforms. Online sellers and renters need to understand the thresholds triggering sales data sharing with HMRC and the potential need for Self Assessment registration and tax payment. This highlights the importance of compliance with tax regulations for individuals engaged in online selling and renting activities.