Received a nudge letter from HMRC?
HMRC is increasing its focus on online sellers, targeting individuals selling on digital platforms such as eBay, AirBnB, Deliveroo, as well as online sites for private tutors, influencers, and more. Many have already received letters about taxable online trading – are you at risk?
- New HMRC Regulations – Digital platforms must now report user earnings – this is not a new ‘side hustle tax’.
- Tax-Free Allowance – Earn up to £1,000 tax-free per year.
- Disclosure Requirements – Some users may need to notify HMRC of historic earnings.
- Penalties for Non-Compliance – There are higher fines if HMRC contact you first.
Don’t wait until HMRC contacts you – take action now. Call our hotline for a free consultation.
Get expert tax advice today
Understanding your tax obligations
If you earn more than £1,000 in income that isn’t your normal PAYE employment income within a tax year you should be notifying HMRC and filing self assessment tax returns.
There is no new ‘side hustle tax’ but the new rules mean HMRC will learn of your sources of income if you are selling your goods or services through a digital platform.
The important thing is not to panic, but to seek professional advice if you are unsure of your obligations.
HMRC may also ask you to consider whether instead of income tax owing on the sale of your personal items, you may instead have a capital gains tax liability.
Digital Platform FAQs
What should you do next?
If you think you might need to report your income, seek professional advice as whether you need to disclose or pay any tax will depend on your unique circumstances.
If you have been earning more than £1,000 for more than just the last tax year, you may need to make a disclosure. This can be done via HMRC’s Digital Disclosure Service (DDS).
In more serious cases of deliberate tax evasion, COP9 protection may be required to prevent criminal prosecution.
You may also need to register for self assessment and file tax returns on an ongoing basis.
If you earn money through online platforms and are unsure about your tax obligations, our Tax Disputes and Disclosures Team can help. Contact us today for expert guidance.
What happens if you ignore this?
Do not ignore a letter from HMRC. If you receive a nudge letter, seek professional advice from advisers experienced in this area.
If you need to make a disclosure and you choose not to come forward, then you can expect HMRC to open an enquiry into your tax affairs.
If HMRC contact you before you notify HMRC, you can also expect higher financial penalties, and there is a risk HMRC will widen their investigation into other aspects of your tax affairs.
