Got a Side Hustle? HMRC’s New 2024 Rules Could Affect You!

Got a Side Hustle? HMRC’s New 2024 Rules Could Affect You!

It’s time to thing about declaring your side hustle earnings as the UK’s HM Revenue and Customs (HMRC) is introducing new rules to address undeclared income from side hustles. Effective from 1st January 2024, these rules aim to enhance transparency and compliance in the gig economy. Here’s a detailed overview of what these changes entail:

  1. Increased Data Sharing: Starting 1st January 2024, individuals who generate income through side hustles may have their bank account details shared with HMRC. This measure is part of a broader effort to ensure proper tax reporting and payment by those earning extra income on the side of their employment or businesses.
  2. Mandatory Registration for Self-Employment: If your earnings from freelancing or side hustles exceed £1,000 in a tax year, you are required to register as self-employed with HMRC. This rule applies regardless of the nature of your freelance work, whether it be consulting, dog walking, or any other activity. Once registered, you will need to file a self-assessment tax return annually and settle any tax dues.
  3. Freelancer Platform Reporting Requirements: Freelancer platforms such as eBay, Airbnb, Fiverr, Upwork, Uber, and Etsy will be obligated to record and report their users’ earnings to HMRC from 1 January 2024. This change signifies a significant step in HMRC’s efforts to combat tax evasion and ensure fair taxation among those earning through these platforms.
  4. Self-Assessment Registration Deadline: You have the chance to report your side hustle income before the 31st Jan 2024. This applies to income for the tax year to 5th April 2023. Remember this is for income exceeding £1,000 in the year, before any expenses have been deducted.

HMRC has invested millions to crack down on individuals who fail to report their side hustle income and these rules represent HMRC’s commitment to modernizing tax compliance in an increasingly digital and flexible economy. It’s essential for those engaged in side hustles to understand these changes and take appropriate actions to comply with the new regulations.

Talk to us about your side hustle that you need to declare

If you have side hustle income that you now need to declare, do Get in touch with us. We’ll help you work out the tax due to HMRC and submit your self assessment before the 31st January deadline.

By Chidi

Virtual Focus Accountants

Tech focused Accountants our clients trust