The HMRC is warning anyone making more than £1,000 a year from side hustles, ranging from selling online to dog walking and even babysitting that they will need to fill in a tax return.
A new online guide has been published to help people understand when they need to fill in a self-assessment tax return.
The document also warns that anyone raking in more than £6,000 from the sale of a single item, such as a painting or piece of jewellery, could be liable to pay Capital Gains Tax on their profits.
New income disclosure rules introduced by the government cover a vast range of side hustles from selling through online auction sites to taxi or delivery driving, creating online content as a social media influencer, and renting out rooms on Airbnb.
It also brings in simple everyday tasks such as babysitting services offered by youngsters to gardening, dog walking and tutoring.
The new guidance states: “You may need to tell if you receive income through an online marketplace or social media, even if you do not need to pay tax on it. This could be whether it’s your main source of income or an additional source — sometimes called a ‘side hustle’.”
It adds that income could be money, gifts or services you have received from:
* selling personal possessions
* selling goods
* providing a service
* creating online content
* renting out a property or land
operates an online checking tool at this link – – which asks a series of basic questions about what people are selling.
This includes a question relating to the associated income and advises anyone bringing in more than £1,000 that they will need to fill in a self-assessment tax return, even if this income does not make them liable for paying income tax.
Importantly, the many online companies that support side hustles, such as eBay, Vinted, Airbnb will also be providing information to the on the earnings of customers through their accounts. These will be cross-checked against tax returns submitted by individuals.
The HMRC is warning anyone making more than £1,000 a year from side hustles (Image: Getty)
Sales of personal possessions
The said these include: clothing; ornaments; kitchen equipment; table and chairs; jewellery; computers and phones.
The said: “If you’re only selling personal possessions, you’ll probably not have to pay Income Tax on these.
“However, depending on the items you sell and how much you sell them for, you may need to pay Capital Gains Tax. This applies to selling personal possessions where the item is worth more than £6,000.”
The £6,000 limit for Capital Gains Tax that applies to a single personal possession also applies to the total value of items which form a set, for example:
chess pieces
books by the same author or on the same subject
matching ornaments, such as vases or statuettes
Example — cash in the attic
You’re clearing out your attic and decide to sell your unwanted items using an online marketplace. It’s unlikely that you’ll need to tell about this income or pay any tax, as long as none of the items are worth more than £6,000.
Example — selling a personal possession for profit
You’re renovating your home and decide to sell a picture you own using an online marketplace. You bought it 5 years ago for £1,600 and you sell it at the current market value of £8,000. You may need to tell about this income, as you’ve made a gain of £6,400.
Selling goods
said people should be considered as a “trader” if they sell goods that you have:
bought intending to sell for a profit
made, including items you make for a hobby
Example — upcycling and selling
You upcycle second hand furniture as a hobby with the intention to resell. You sell them through an online marketplace.
You have received income through an online platform from selling goods and you may need to tell about this income.
Example — importing items to sell
You import cameras and accessories online from the far east and sell them on an online marketplace, making a profit.
Example — reselling clothes and other items
After making some money from selling unwanted clothes, you begin to buy items from car boot sales and charity shops which you then sell through online marketplaces, aiming to sell for more than you paid for them. This is something you do consistently.
Providing a service
You may need to tell the taxman if you earn money from providing services for others, for example:
gardening and repairs
dog walking
taxi driving
delivering food
tutoring
babysitting and nannying
hiring out equipment
Example — babysitting and nannying
You provide nannying and babysitting services. You use an online platform to create a profile and advertise and sell your services.
A new online guide has been published (Image: Getty)
Creating online content
You may be required to fill in a tax return form if you earn money Income, or receive and services, from making online content or promoting products online. For example:
making online videos
producing podcasts
social media influencing
Example — social media influencing
You are a content creator and influencer with a social media channel where you review beauty products. You receive advertising income on your videos. You also receive gifts from the companies you review.
Renting out land or property through, for example, Airbnb
Land or property could be:
a room in your main home, including as a bed and breakfast
your main home
a property that is not your main home
land, for example your driveway
Example — renting out your spare room
You rent out your spare room for short-term lets using an online platform. You receive regular payments from the online platform after your guests have checked in.
The tool to help people understand if they will need to fill in a tax return can be found .