UPDATE: HM Revenue and Customs (HMRC) has just announced an urgent reminder for individuals engaged in side hustles to report any additional income they may be earning. With many people turning to extra jobs such as online selling, dog walking, or tutoring, failing to declare these earnings could lead to hefty tax bills.
As side hustles become increasingly popular, HMRC warns that income exceeding £1,000 must be reported to avoid unexpected tax penalties. Authorities emphasize that even if this money isn’t part of your primary salary, it may still be subject to tax regulations.
In a post on X, HMRC stated:
“Do you have a #sidehustle? We’re here to help you get your tax right. Use our tool to check if you need to tell us about your extra income today.”
Individuals may be caught off guard by tax obligations if they do not stay informed. The implications of underreporting additional earnings can be severe, including significant financial penalties.
To assist, HMRC provides a free online tool that helps users determine whether they need to report their side hustle income. This user-friendly checker prompts individuals to answer questions regarding their earnings, including any payments received, gifts, and the value of services exchanged. It also requires users to factor in any necessary deductions for expenses like fees or commissions.
Once submitted, the tool will clarify if HMRC needs to be informed about the income and explain the reasoning. For instance, if classified as a sole trader due to service income exceeding the £1,000 trading allowance, individuals must register for self-assessment and declare their income accordingly.
With the tax year rapidly approaching, the urgency to comply is critical. Those unsure about their tax responsibilities are encouraged to utilize the HMRC tool as soon as possible to avoid penalties or fines.
For more information on trading allowances and how to navigate tax responsibilities, visit the official HMRC website. Protect your finances and ensure you’re up to date with your tax obligations today!
