Unsurprisingly, there’s been a lot of irresponsible reporting about the news that online platforms like Ebay, Airbnb, JustPark and Deliveroo are going to be compelled to pass details of people they’ve paid on to HMRC. It’s been reported that this was a new side hustle tax. It isn’t! The rules on whether an activity is taxable or not haven’t changed for decades, aside from the introduction of the £1,000 Trading Allowance and similar Property Allowance a few years ago, which means people with very low levels of such income don’t have to report it or pay tax on it.
Further bad reporting stemmed from the de minimis levels below which the platforms *won’t* have to give any information to HMRC. If you sell fewer than 30 items and make less than 2,000 euros (it’s a global OECD campaign) then nothing will be passed on to HMRC. It’s been reported that selling 30 or more items a year is taxable but selling fewer is not. That’s wrong too! If you bought and sold 25 grandfather clocks in a year for profit it’s taxable. If you sold 150 of your old CDs it’s not. It’s just a threshold relating to the reporting from the platform to HMRC, nothing more. It has no relationship to tax legislation of any sort.
For more detail, the ATT’s explainer is really good.
If you’ve been regularly buying stuff in order to sell it on at a profit, it’s probably always been taxable. If you’ve been declaring it and paying tax on it, you might actually find the new system helpful, as the platform will be sending you the handy record of your transactions as well as sending it to HMRC! But if you’ve not been reporting it, either because you didn’t realise you had to, or you did realise you had to but didn’t do it anyway, tell your accountant! It’s better to go to HMRC before they come to you.