HMRC issues one-week warning for anyone with side hustle to avoid £100 fine
HMRC has issued a one-week warning for anyone with a side hustle to act to avoid a £100 fine. If you earned more than £1,000 in the last tax year from your side hustles, you need to register for self-assessment, HMRC has warned.
If you miss the October 5 deadline for registration and then fail to send in a tax return on time, you'll likely face a fine. You can earn £1,000 in additional income each tax year alongside your regular job - this is known as your Trading Allowance.
If you make more than this, then you may need to pay tax and will have to register for self-assessment where you'll record your extra income to HMRC. But HMRC says you will “unlikely” need to pay tax if you are just selling some unwanted items from your home.
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There is a difference for those who are regularly selling items online for profit - this is considered to be “trading” and may mean you need to pay tax. If you make less than £1000 in a tax year from your hustle, it doesn’t count as taxable income, and you don’t have to declare it.
Once you start making more than this, you need to register as self-employed and start paying tax on the money earned over this amount. You also need to register if you were a sole trader, you were a partner in a business partnership, you had a total taxable income of more than £150,000, you had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value or you had to pay the High Income Child Benefit Charge
The deadline for registering is October 5. If you want to file a paper return, it needs to be in by October 31. If you’re submitting online, you have until January 31.