HMRC Is Cracking Down on Unreported Side Hustle Income This Christmas
With the festive season in full swing, many Brits are taking advantage of their side hustles to earn extra cash. However, HM Revenue and Customs (HMRC) is warning thousands of crafters, artisans, and online content creators that they need to report any earnings above £1,000 or risk facing an unexpected tax bill.
The UK's self-employment allowance allows individuals to earn up to £1,000 on top of their main job without paying tax. But those who exceed this limit must register for self-assessment, file a tax return, and pay any tax due by January 31st. This includes sales from Christmas markets, online platforms, or social media promotions.
What sets apart personal decluttering activities from taxable side hustles? HMRC's guidance makes it clear that simply selling unwanted items at home is exempt from tax, but making items to sell for profit or buying merchandise to resell online can be considered taxable income. For example, someone earning £600 from craft sales and £500 from posting content online would need to register as their total exceeds £1,000.
But it's not all bad news. HMRC offers a personal allowance of £12,570 per year before paying taxes, allowing individuals to earn extra cash without incurring tax liabilities. Additionally, allowable expenses can be deducted from income to reduce tax bills. These might include office costs or website fees, provided they relate entirely to the side hustle.
While the focus is on Christmas sales this year, HMRC's rules apply all year round and cover a wide range of activities that generate extra income outside of main employment, including selling items, providing services, and creating content.
To avoid any potential tax issues, it's essential to keep accurate records of sales, income, and business expenses. This includes invoices, receipts, and bank statements – even if using a tax agent or accountant. HMRC emphasizes that individuals are responsible for maintaining full and accurate records to complete their tax returns correctly.
With the tax deadline looming, side hustlers should take heed of HMRC's warnings to ensure they're meeting their tax obligations and avoiding any unexpected bills.
With the festive season in full swing, many Brits are taking advantage of their side hustles to earn extra cash. However, HM Revenue and Customs (HMRC) is warning thousands of crafters, artisans, and online content creators that they need to report any earnings above £1,000 or risk facing an unexpected tax bill.
The UK's self-employment allowance allows individuals to earn up to £1,000 on top of their main job without paying tax. But those who exceed this limit must register for self-assessment, file a tax return, and pay any tax due by January 31st. This includes sales from Christmas markets, online platforms, or social media promotions.
What sets apart personal decluttering activities from taxable side hustles? HMRC's guidance makes it clear that simply selling unwanted items at home is exempt from tax, but making items to sell for profit or buying merchandise to resell online can be considered taxable income. For example, someone earning £600 from craft sales and £500 from posting content online would need to register as their total exceeds £1,000.
But it's not all bad news. HMRC offers a personal allowance of £12,570 per year before paying taxes, allowing individuals to earn extra cash without incurring tax liabilities. Additionally, allowable expenses can be deducted from income to reduce tax bills. These might include office costs or website fees, provided they relate entirely to the side hustle.
While the focus is on Christmas sales this year, HMRC's rules apply all year round and cover a wide range of activities that generate extra income outside of main employment, including selling items, providing services, and creating content.
To avoid any potential tax issues, it's essential to keep accurate records of sales, income, and business expenses. This includes invoices, receipts, and bank statements – even if using a tax agent or accountant. HMRC emphasizes that individuals are responsible for maintaining full and accurate records to complete their tax returns correctly.
With the tax deadline looming, side hustlers should take heed of HMRC's warnings to ensure they're meeting their tax obligations and avoiding any unexpected bills.
. I mean, what's the harm in making some extra cash on the side? Just to be safe, I'd keep track of all my sales and expenses, even if it's just for myself 
. Don't wanna get caught off guard by a tax bill over Christmas. And I guess it's good that HMRC's got our backs with that £12,570 allowance... but still gotta stay on top of things 
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OMG, I'm so glad the gov is on top of people making that extra cash! But at the same time, it's crazy how much some ppl are earning from selling stuff online... £600 from craft sales? That's not bad, but £1k+ is a whole different story 
. And yeah, keeping track of all those records can be soooo stressful 
. I feel like some ppl just aren't taking HMRC seriously and that's why they're getting hit with unexpected tax bills... 
got a friend who sells handmade stuff on Etsy and she's been dodgy about keeping track of her sales. just found out that if she earns over £1k, she gotta pay taxes lol what even is that? 
but if u r makin over £1k u gotta be careful n register 4 self assessment... don't wanna get hit with a big tax bill at xmas time 
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. I get it, though, HMRC is just trying to make sure everyone's being fair and contributing to the system... but come on, can't we just have one nice tax-free Christmas for once? 
. According to HMRC's data, 44% of self-employed individuals earn less than £10k per year 
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. Maybe they could even partner with organizations that support entrepreneurship and small business development? Just a thought 
. Just keep those records accurate 
invoices, receipts, bank statements – all that jazz! 
i do think hmrcc should make it easier for people to file their taxes online, tho - all these forms and whatnot can be super overwhelming 
... if you're making items to sell for profit, HMRC wants their cut 
#HMRC #SideHustleTax #ChristmasCrackdown