A WARNING has been issued to anyone involved in side hustles such as selling on second-hand clothing sites: in the new year, the taxman is to launch a crackdown.
Anyone who earns more than £1,000 in a tax year from such activity, or even baby sitting or dog walking, needs to ensure it is declared on their self-assessment forms.
According to a recent money.co.uk survey, almost a third of UK workers have found ways of earning extra cash to supplement their income due to the cost of living crisis.
Its business loans expert, Cameron Jaques, has cautioned people to ensure they’re paying the right amount of tax.
“While extra cash is always welcome, some side hustlers won’t be used to the tax implications of working for themselves, and could easily land themselves in hot water with the tax man,” he said.
“The bottom line is, whether it’s selling on sites like Vinted or Depop, doing a bit of dog walking or babysitting, if you’re earning more than £1,000 in a tax year from your side hustle, you must register as self-employed with HMRC, even if you are also in full-time employment.”
He continued: “You must file a self-assessment tax return and pay the tax yourself – it doesn’t automatically come out of your pay packet like with PAYE.
“If you fail to do this, due to new HMRC rules coming in on January 1, you could find yourself in tax trouble in April 2025.
“Understanding how to avoid any unwelcome tax bills is a key part of having more than one job, so if you are tempted to start a side hustle, do your research first.”
He said that Money.co.uk has information to help people with this.
