From January 2024, HMRC will be cracking down on side hustles and online businesses
The pandemic saw an uptake in people starting online businesses and side hustles to bring in extra income and now HMRC is catching up. However, with the turn of the year, HMRC will be increasing its examination of online traders. From January 2024, HMRC will be collaborating with platforms such as Airbnb, eBay, Vinted, Etsy, Uber, and many others, aiming to determine the annual earnings of their UK-based users. In this crackdown, HMRC will cross-reference the information obtained from these platforms with the tax return records of individuals and businesses. Should any discrepancies arise, they may open a tax investigation into these online traders. Consequently, affected entities may be required to submit earnings information to HMRC, which may lead to penalties and other consequences. The responsibility to register with HMRC, report earnings and pay income tax falls on the individual.