New HMRC Rules for Online Sellers
HMRC has introduced new rules that affect anyone who sells items on sites such as eBay, Vinted, Etsy, or Depop or people who rent out their homes on Airbnb and other similar sites.
If you're a delivery driver for the likes of Deliveroo or Uber Eats, for example, or you sell your freelance services through a website and earn money from doing so, you'll also come under the new regulations.
Here in the UK, the tax authorities will use the data they receive due to these new rules and cross-reference it with other records it holds about you and your business to ensure that you're reporting your income accurately.
The legislation in the UK will apply to any digital platform that is resident for tax purposes in the UK.
Such platforms will be required to report specific data concerning the sellers using that platform, regardless of whether those sellers are UK taxpayers or not.
The new digital platform reporting rules:
- Essentially, HMRC will have more data available to ensure that any UK taxpayer (not just those running a side hustle) with an income from a digital platform is declaring the correct amount of income.
- But they won't have to begin reporting this information to the authorities until 31 January 2025, to cover 2024 calender year.
- The data that's collected by digital platforms can be used by HMRC to check what you've submitted via Self Assessment.
- The changes don't affect what is known as the trading allowance. Also called the trading and miscellaneous income allowance and currently set as £1,000 per tax year, this is the amount you can earn from trading or from casual and miscellaneous activities before you have to pay income tax and National Insurance.
- Individuals also enjoy a £1,000 tax-free allowance for money made through property.
What do you think of the recent update and how will this affect you?
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