New tax regulations take effect today that could result in £100 fines. Those who sell items on platforms like Vinted and eBay may be required to register for a tax return, particularly if they earn over £1,000 through a ‘side hustle’.
This would include online sales or renting out spare rooms via apps like AirBnB. The move comes after HMRC’s introduction of new rules at the start of the year.
They required platforms like Etsy and eBay to share seller information, including sales numbers and earnings, with HMRC. Sellers have until today (October 5) to inform HMRC if they need to complete a tax return, regardless of whether they have done so before.
Failure to do so may result in a £100 fine. Alastair Douglas, CEO of TotallyMoney, cautions against missing the October 5 self-assessment registration deadline. He stated: “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,” reports the Manchester Evening News.
“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 had to pay the High Income Child Benefit Charge
- you had to pay Capital Gains Tax when you sold or ‘disposed of’ something that increased in value
- you were a partner in a business partnership
- you had a total taxable income of more than £150,000
You may also need to send a tax return if you have any untaxed income, such as:
- income from savings, investments and dividends
- tips and commission
- money from renting out a property
- 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.