Side hustle; a current buzzword, and quite rightly so. The sense of entrepreneurial spirit and opportunity to master new skills, should be applauded. Whether an opportunity to earn extra money or the drive to dip your toe into your dream career, there is much to be admired for fulfilling a day job and devoting extra time to a side hustle. Who knows where it could take you!
HM Revenue & Customs (HMRC), however, are reminding taxpayers of their obligations, with their “tax help for hustles” campaign and asking them to check whether they should be registering for self assessment and completing a tax return.
As the popularity of online income streams continues to grow, more individuals are turning to platforms such as Etsy, Airbnb, and Vinted to generate income. In response to this trend, new reporting requirements have been introduced for these digital platforms, including seller identities, sales figures and frequency of transactions. HMRC now has better access to trading data, making it easier to spot undeclared income and tax liabilities.
If you are using these platforms to earn additional income, this means it is more important than ever to understand what qualifies as trading, when your income needs to be reported, and what your personal tax responsibilities are.
The occasional declutter of unwanted items is unlikely to constitute trading. Currently, the trading allowance is £1,000, set to rise to £3,000 in 2027. Therefore, if earnings from influencer content, online tutoring, or any side hustle for that matter, are in excess of £1,000, it is important that you register for self assessment and pay any tax due.
Tax and PR gifts
You should also consider whether any PR gifts received in exchange for content creation may be taxable. The tax treatment of such gifts depends on their nature, value, and the purpose for which they were given.
Influencers are often provided with free products in lieu of direct payment, with the expectation that they will feature or promote the item on their social media platforms. In such cases, HMRC is likely to treat the gift as a “Payment in Kind” – where goods are received instead of cash and calculating the fair value of these payments is sometimes not straightforward
If the value of the Payment in Kind exceeds £50, it is likely to be considered taxable income and should be declared accordingly. The rules in this area can be complex, so if you are unsure about your obligations, it is always best to seek advice from a qualified accountant.
How M+A Partners can help
M+A Partners’ tax experts provide specialist advice to guide you through the complexities of tax, helping you to plan ahead and remain compliant.
If you would like further guidance on your tax obligations, the expenses you may be able to claim against your profits, or advice on accounting software to help you keep track of your income, get in touch using the details below.
