Online side hustlers to feel HMRC’S wrath?

Published: 11th January 2024

Despite the sensational headlines, no new taxes have been introduced. In fact, it’s always been the case that if you are trading, i.e. attempting to make a profit, you may be subject to income tax and NI on those profits. Where profits exceed £1,000, you are required to report the income and expenses to HMRC, via a self-assessment tax return, even if there is no tax to pay. For example, this could be the case if profits are below the personal allowance of £12,570 per annum. For those where the online selling is a secondary income source, the £1,000 de minimis still applies, i.e. if you have earnings from your main job that exceed the personal allowance, you can earn up to £1,000 as a self-employed individual tax free.

If you are using online selling sites, it’s important to recognise whether you are trading or not. A quick rule of thumb would be that if you are making a profit, you are likely to be trading. For example, if you are importing goods from China and listing them on Amazon at a higher price, this is clearly a trade and profits exceeding £1,000 are taxable. Likewise, if you are making goods, such as candles, and selling them on Etsy, you are trading. Whereas, if you are selling unwanted gifts, and your second-hand clothes/toys/furniture etc., you are unlikely to be trading and unlikely to be making a profit.