Tax Rules Changing from 01 January 2024

You may have seen the news that a huge change is hitting tomorrow for anyone that sells clothes or other items online.

Back in July 2023 ICAEW reported that OECD rules requiring online marketplaces to report the details and income of the sellers of goods and services on their platforms will apply in the UK.

Information on sellers will be collected by online marketplaces from 1 January 2024 and the first reports are due by 31 January 2025.

So from tomorrow Monday 1 January 2024 if you sell on platforms such as Depop and Vinted you could be hit with a tax bill if you don’t brush up on the latest tax rules. From tomorrow online platforms will be required to record how much income people are making through the online platforms.

If you generate income through a side hustle you may already know that you are expected to complete a tax return, this can be completed fairly easily via your online gov.uk login. You can also use the government gateway login to register and notify HMRC that you need to submit a tax return if you havn’t done this already.

HMRC will also verify the sales data with the online selling platforms direct against the information that they receive from the tax payer. This is an important change to be aware of if you have a side hustle that is generating a profit.

We mentioned a few weeks ago about HMRC investing over 36million into tackling tax evasion so getting organised will be super important for those that need to report income generated through out the tax year.

Penalty’s and fines will apply for late or incorrect tax information, with an instant £100 penalty and up to £1,000 for late filing alone.

You must submit a HMRC Self assessment tax return if you earn over £1,000 during the tax year that rund 06 April to 05 April. There may be times where a tax return may be beneficial if earning below this amount, so do check this with a professional

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If you need help checking if your side hustle needs to be reported to HMRC then get in touch at [email protected]