Are you earning extra income through online sites like eBay, Uber, Vinted etc? Do you pay tax on income above £1000? HMRC move to levy tax on excess earners
People in Britain are struggling to survive on the income they get from regular jobs. Therefore, there are many people who make extra thousand or two thousand a month by doing some programs that generate extra income. Especially when the online platform has so many facilities for it. This income has not yet been taken into account by HMRC. But the tax office in Britain is now preparing to monitor those who generate extra income through online marketplaces and collect tax from them.
HMRC has decided to monitor those who make money through websites like eBay, Uber, Vinted and Airbnb. The new law, which came into effect on January 1, requires websites to record how much revenue visitors earn and the websites themselves to report it. The new measure means that those who resell clothing on Vinted or drive for Uber will come under increased scrutiny from HMRC.
HMRC will compare this information with self assessment reports submitted by individuals. HMRC will then initiate an investigation to check for non-compliance where tax is suspected. HMRC spends around £37 million on this. Moreover, 24 full time staff have also been appointed. Platforms such as Winted, Fiver and Upwork are also under HMRC’s scrutiny.
The additional income is known as trading allowance. People can earn up to £1,000 in extra income each year alongside their regular job. However, those earning over £1,000 must register as self-employed and pay tax on this income. The new move is part of new rules for digital platforms to crack down on freelancing and self-employment. The new measures will not affect those who pay taxes in full compliance with the rules.
HMRC targets those who work extra with another job and do not pay tax on their own income. This includes the self-employed, freelancers, and those who have additional work alongside another job.
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