HMRC tax warning for Vinted, eBay and Airbnb users - how to avoid £100 fine
Individuals using selling platforms like Vinted and eBay are being reminded to be aware of the newly implemented tax rules that kicked in earlier this year.
The tax authority, HM Revenue and Customs (HMRC), is advising users to examine whether they need to file a self-assessment tax return as the deadline to register looms closer. The gov.uk website notes: "You must tell HMRC by 5 October if you need to complete a tax return and you have not sent one before. You could be fined if you do not."
Anyone who has earned in excess of £1,000 from a 'side-hustle' may be required to submit a tax return. Such side hustles encompass activities like selling goods on well-known apps such as Vinted and eBay, not to mention renting out extra rooms via platforms such as Airbnb.
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This reminder emerges in the wake of new regulations for these so-called side hustle ecosystems introduced by HMRC at the dawn of 2024. Starting from January 1, digital marketplaces including eBay, Airbnb, Etsy, Amazon, and Vinted have been obliged to share details about their vendors, which includes transaction numbers and the total revenue, with HMRC.
In the past, numerous vendors might not have recognised the necessity to declare their earnings; however, the fresh information-sharing stipulations aim to clamp down on individuals securing substantial financial gains through such channels, reports the Manchester Evening News.
Online sellers with an annual income surpassing the £1,000 threshold from online side ventures will potentially need to register for self-employment and then proceed to lodge a self-assessment tax return once the fiscal year concludes.
The question of whether you owe income tax on your earnings hinges on if HMRC deems you to be trading. For those just selling off old unwanted belongings, it's unlikely they'd be categorised as traders.
On the flip side, purchasing items for resale at a profit certainly fits the trader bill.
For modest earners bringing in under £1,000, their profits fall under the 'trading allowance' that grants up to £1,000 of income tax-free, with no obligation to report this income to HMRC.
HMRC took to social media recently to prompt: "Check if you need to register for Self Assessment by 5 October. You might need to if you: Have earned more than £1,000 through a side-hustle. Are newly self-employed. Rent out a property."
Those new to filing who need to sign up must do so by October 5. Once registered, the cut-off for submitting your digital tax return is January 31 at the stroke of midnight.
As stated on the gov.uk website, a tax return is necessary for the previous tax year if:.
You should also consider submitting a tax return if you have any untaxed income, such as:.
Should there be any confusion, gov.uk offers an online checker to ascertain if a tax return is necessary for you.