As of January 1st, 2024, it is now the law that anyone who makes more than £1000 on “side hustles” such as selling clothes online or offering services such as eyelash extensions, could be required to pay tax to the HMRC. This is because the tax authorities are now identifying those who must declare extra income. The new rules include those making incomes such as taxi or food delivery services, Airbnb hosts, freelance work, mobile services, online marketplaces, and more. In this article, we are going to be giving you a deeper insight into this rule and how it could affect you.
What Is This Rule and Why Has This Just Been Announced?
The new tax rule has been brought in by the government and the HMRC to help clamp down on tax dodgers led by the OECD, also known as the Organisation for Economic Cooperation and Development. This £1000 annual trading allowance rule was originally brought to light in April of 2017 and since then they have reduced the numbers of tax dodgers but not enough to leave it there. Since January 1st, 2024, the HMRC government have made it well known that moving forward, anyone that earns over £1000 on their “side hustles” will have to submit a tax return self-assessment.
Even those doing something like selling second-hand clothing or tutoring kids, will have to abide by this newer rule to avoid complications from the HMRC.
Over recent years, people have begun selling second-hand clothing and belongings on marketplace apps such as Depop, Vinted, and more well-known, eBay. Even though you are selling something second-hand and not brand new like a business, you will have to keep record of how much you are earning just in case you are asked for any financial statements in the future.
What If I’m Not 100% Sure About This New Rule and Need Some Additional Advice?
If you aren’t good with numbers, or you think you are going to make over £1000, we are always here to help you. At MCC Accountants, we are one of the leading accounting practices in the Northwest. With almost 15 years of business experience, MCC Accountants can give you the correct and legal financial advice you need that will comply to this new rule.
We are trusted by over 200 local businesses throughout the Northwest and can offer a complete tailored service for each individual client to suit their needs. You will be given your own individual accountant to chat to at any time, whether it is a simple question or a more serious concern.
Our 5-star rated service can allow you to relax and not have to worry about finances being incorrect or not being paid on time. Our team of accountants are always up to date and aware of any changes or deadlines that need to be met.
If this sounds like something you want to enquire further about, then please don’t hesitate to reach out to the best accountants in Manchester, today!