New tax regulations are set to take effect this weekend, potentially resulting in fines of £100 for individuals who sell items on platforms like eBay, Vinted, and Depop. Those engaging in ‘side hustles’ that generate more than £1,000 in income, such as selling goods online or renting out rooms through services like AirBnB, may be required to register and file a tax return. The changes follow HMRC’s implementation of new rules earlier this year, which mandate platforms like Etsy and eBay to disclose seller information, including sales volume and earnings, to HMRC.
HMRC has issued a warning that individuals have until October 5th to inform the department if they are obligated to file a tax return, regardless of whether they have done so in the past. Failure to meet this deadline could lead to a £100 penalty. Alastair Douglas, CEO of TotallyMoney, stresses the importance of not missing the self-assessment registration deadline on October 5th. He emphasizes that individuals must report any income received over the past year, not just earnings from traditional employment.
In addition to income from work, individuals must disclose earnings from savings, investments, rental properties, and sales or resales exceeding £1,000 on platforms like eBay, Depop, and Vinted. It is essential to determine if a tax return is required and register by the deadline to avoid penalties. Failure to register by the deadline incurs an automatic £100 fine, with additional daily charges if left unpaid.
The deadline for paper tax returns is October 31st, while online submissions must be completed by midnight on January 31st. To prevent last-minute rush and potential delays due to high call volumes, individuals are advised to prepare and submit their returns early. The gov.uk website outlines specific circumstances that necessitate filing a tax return, such as self-employment, partnership in a business, high taxable income, Capital Gains Tax liability, or High Income Child Benefit Charge.
Individuals with untaxed income from sources like property rentals, tips, commissions, savings, investments, dividends, or foreign earnings may also be required to file a tax return. The gov.uk online tool can help determine if a tax return is necessary. By staying informed and proactive in meeting tax obligations, individuals can avoid penalties and ensure compliance with HMRC regulations.