New tax regulations set to be implemented this weekend could result in many individuals being slapped with a £100 fine. Specifically, those who sell goods on platforms such as Vinted and eBay may need to register to submit a tax return.
This is particularly crucial for anyone raking in more than £1,000 through a ‘side hustle’. Such side hustles can include selling items online or letting out spare rooms via apps like AirBnB.
This follows the introduction of new rules by HMRC at the beginning of this year, compelling platforms like Etsy and eBay to disclose seller information to HMRC, including the number of sales made and the revenue generated from these sales. HMRC has issued a warning that sellers have until today to inform the department if they need to complete a tax return and whether they have submitted one previously or not.
Failure to do so could lead to a £100 fine. Alastair Douglas, CEO of TotallyMoney, cautions against missing the deadline. He said: “The 5th of October marks the self-assessment registration deadline, meaning you’ll need to notify HMRC if you’ve received income over the past year and haven’t yet paid tax on it. While you might think it only applies to work you’ve been paid for, it also includes other income.
“This might include money earned from savings and investments, rental income, and if you’ve made more than £1,000 from selling or reselling items on places like eBay, Depop and Vinted. So check online to find out if you need a tax return.
“If you don’t register by the deadline, there’s an automatic £100 fine – even if there’s no tax due. If you haven’t paid that after three months, HMRC will charge you £10 per day up to £900, and after six months 5% of the tax due or £300 – whichever is higher. This will repeat again after 12 months, so it’s important to stay on top of things from the start.”
“This means getting everything ready for the 31st October deadline if you’re submitting a paper return, or by midnight on the 31st January if you’re submitting your return online. But if possible, you shouldn’t leave things to the last minute.”
“That’s because with more than 12 million people filing for self-assessment, government helplines are likely to jam, making it difficult to get through to advisers, and potentially scuppering your chances of meeting the deadlines.”
According to the gov.uk website you must send a tax return for the last tax year if any of the following applies:
- you were self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- you were a partner in a business partnership
- you had a total taxable income of more than £150,000
- you had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
- you had to pay the High Income Child Benefit Charge
You may also need to send a tax return if you have any untaxed income, such as:
- money from renting out a property
- tips and commission
- income from savings, investments and dividends
- foreign income
If you are unsure, you can use the gov.uk’s online tool to check whether you need to submit a tax return.
