Online Side Hustlers sent letters from HMRC about unpaid tax
Online Side Hustlers sent letters from HMRC about unpaid tax
HMRC has now started sending letters to online sellers and side hustlers it suspects of not paying tax or disclosing sales on online platforms in 2022-23, giving them just 30 days to respond.
The letters will need immediate action and if HMRC do not receive a response, they will open a compliance check. Side hustlers in the sights of HMRC include online content creators, landlords, sellers importing cheap goods to resell, dog walkers and tutors!!
In the letters, HMRC states that it has information that the individual has earned income from online marketplace sales up to the tax year ending 5 April 2023, which may not have been declared.
HMRC have stressed. ‘You’re likely to be trading if you buy or make goods to sell at a profit. This means you may have to pay tax on your profits.’ ‘You need to tell us about this income. This is because you may owe tax,’
If total income is more than the £1,000 trading allowance for the tax year (6 April to 5 April), it has to be declared to HMRC.
Any sellers with income to declare from any tax year up to 5 April 2023 must take swift actions. There is useful guidance available on gov.uk page, Tell HMRC about underpaid tax from previous years, then follow the instructions, there is also a dedicated helpline number – 0300 123 0998, if you call you will need to quote the reference number at the top of the letter.
Once you have contacted HMRC, the tax authority will respond by letter with a payment reference number (PRN) and there will then be a deadline of 90 days to declare income and pay anything owed, including any interest and penalties.
HMRC now has access to data after online platforms such as eBay, Vinted, Facebook Marketplaces, and so forth, had to disclose sales activity of all their sellers.
The first reports were sent to HMRC in January, giving HMRC the ammunition to target side hustlers if they suspected any tax avoidance and/or evasion.
The HMRC letter campaign is targeting people who sell goods online in a structured way that is more than just ad hoc, but it is important to realise that there is a cap on the value of the product sold and some sales could incur a capital gains tax (CGT) charge.