HMRC says use tool or risk being sent £100 fine through post
HMRC has launched a new tool to check if you need to pay extra tax - with taxpayers urged to check now or risk a £100 fine. HMRC says if you make money through a side hustle then you may need to report your earnings to the taxman.
HMRC has created a new online platform for earners to check if they owe cash. Dawn Register, a tax dispute resolution partner at accountancy firm BDO said: "This new tool is a useful aid to those who are unsure about whether they will need to file a tax return and how they should declare their earnings and gains.
"Those who do sell online should be aware of the new rules which require digital platforms to report transactions data from users. Digital platforms have a deadline of 31 January to report this data to HMRC for the calendar year 2024, meaning this will cover at least part of the 2023-24 tax year.
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"Those needing to file a return for this period will need to do so before January 31, 2025." Tax usually applies to people who have income from self-employment which is was more than £1,000 or who have earned more than £2,500 from renting out property.
Others affected are if you or your partner received high income child benefits and either of you had an annual income of more than £50,000, received more than £2,500 in other untaxed income, for example from tips or commission or are limited company directors.
Others include shareholders, employees claiming expenses in excess of £2,500 or those who have an annual income over £100,000. Self Assessment is a system HM Revenue and Customs (HMRC) uses to collect Income Tax.
Tax is usually deducted automatically from wages and pensions. People and businesses with other income must report it in a Self Assessment tax return.