HM Revenue and Customs (HMRC) has moved to debunk a common myth that could lead to people receiving £100 fines. The government tax department issued an update on X to tell people they may need to get in touch.
A graphic shared by HMRC features the text: “Myth: HMRC hasn’t been in touch, so I don’t need to file a tax return.” The post adds that people may have to do a tax return if they have “earned more than £1,000 through a side-hustle, are a self-employed delivery driver/rider, rent out a property, [and/or] create online content”.
Failing to file a tax return when it is needed could land you a £100 fine. The number of people required to declare their income has surged due to new rules around declaring earnings from side hustles.
These can range from selling unwanted items on platforms like eBay and Vinted, to renting out property via Airbnb, and even dog walking or babysitting. A link to an online tool which helps people identify if they need to fill out a return can be found here.
Since last year, online platforms have been required to report the sales of anyone who has provided a paid-for service on their websites or apps and sold at least 30 items or earned around £1,700 in 2024. The first reports will be sent to HMRC by the end of January and will leave people unable to hide away any extra income they make from the taxman.
Fiona Fernie, a partner at accountancy firm Blick Rothenberg, said: “HMRC will compare the reports they receive with their self-assessment records to determine if online sellers have paid the correct amount of tax on the income or gains received.
“A failure to register (for self-assessment) can result in penalties of between 20 percent and 70 percent of the tax due where HMRC judges the behaviour to have been “deliberate but not concealed” plus significant interest charges where tax is paid late.”