Reporting a side income - and greater powers for HMRC
It is important to record any side income accurately on your tax return, and especially so as, from 1 January 2024, HMRC will be able to see exactly how much income you receive when using a digital platform.
HMRC have new powers which mean that anyone in the UK who makes money selling goods or services online will have their incomes recorded on the digital platform that they use and HMRC will have direct access to this.
Digital platforms include apps and websites which facilitate the provision of goods and services such as taxi and private hire services, food delivery services, freelance work, and the letting of short-term accommodation.
HMRC will have access to the digital records of businesses such as Airbnb, Fiverr, Upwork, Uber, Deliveroo, Etsy, and other online businesses.
The change is part of a wider plan for HMRC to keep a more accurate eye on people adding to their existing income through side profits or freelancing and they will be checking tax returns to ensure the figures tally with the records from the platforms themselves.
From 1 January 2025, certain UK digital platforms will be required to report information to HMRC about the income of sellers of goods and services on their platform. HMRC will then exchange the information with the other participating tax authorities for the jurisdictions where the sellers are tax resident.
Please talk to us if you have any questions about how to declare income on your tax return. We have considerable experience in helping our clients to fully comply.