Government to ease tax admin for people with side hustles

People who make a modest amount from side hustles, such as dog walking or selling items online, look set to benefit from upcoming tax admin changes.

The government has confirmed that it’s to increase the reporting threshold for trading income from £1,000 to £3,000.

This means that up to 300,000 people, including those with side hustles, will no longer need to file a self-assessment tax return.

The government estimates that about 90,000 of these people will not have to pay any tax at all and no reason to report their trading income to HMRC in the future.

Others, meanwhile, will be able to pay any money they owe through a new online service.

No date for when the changes will be put in place has yet been confirmed, but the government says it will happen in this parliament.

Government wants to promote entrepreneurial spirit

James Murray, the Exchequer secretary to the Treasury, believes the planned changes will enable people to spend less time filling out forms and more time growing their side hustle.

“From trading old games to creating content on social media, we are changing the way HMRC works to make it easier for Brits to make the very most of their entrepreneurial spirit,” he said.

Eve Williams, chief executive of online auction site eBay UK, added: “This will be welcome news for thousands of UK sellers for whom eBay is a side hustle and a means of supplementing their household income during challenging times.”

New rules for Vinted and eBay sellers

This comes shortly after new rules were introduced requiring online marketplaces, such as eBay and Vinted, to share selling information with HMRC.

They won’t be asked to share data about sellers who make fewer than 30 transactions or £1,735 a year.

And if you're trading, rather than just decluttering, you should be declaring anything you make over £1,000.

HMRC has launched its Tax Help for Hustles campaign with everything you need to know about buying and selling online.