General Chat

for those who sell on platforms such as Etsy etc

The HMRC is to fine thousands of people because of a new tax rule, according to experts. Almost a quarter of content creators in the UK - people who make money from platforms like YouTube and TikTok, have not declared their earnings to the HMRC.

Any earnings over £1,000 from platforms like this, as well as from selling on sites like Depop and Vinted, now have to be declared, warns creative expert, and CEO of Quirky Digital , Liam Quirk warns.

A recent survey by Quirky Digital found that 24% of content creators admit not declaring their earnings and paying the taxes owed. They will now be guilty of tax evasion, a crime punishable by heavy fines or even imprisonment.

Liam said: "HMRC has indicated a tougher stance on tax evasion. The incoming tide of fines, due to sweep in the new year, should serve as a wake-up call to content creators.

"As a proactive measure, if you fall within this category, it might be prudent to seek advice from a tax professional."

He advises taking three more steps:

Consider Professional Help : A tax advisor can alleviate the burden of tax complexity, ensuring that you are compliant while also helping you benefit from possible tax breaks.

Educate Yourself : A basic understanding of the tax regulation is essential. It's important to know what constitutes a taxable income, allowable, reliefs and deadlines.

Record Keeping : Maintain a log of all income and expenses. These will serve as vital evidence if HMRC investigates.

He added: "The creative industry is valued for its financial and cultural contributions. But like every sector, it must uphold its fiscal responsibility. Taking steps towards tax compliance will only strengthen its integrity, appreciated by fans, followers, and the taxman alike.

"As we approach the new year, tighten up those loose ends, keep your peace of mind, and keep on creating. Above all, remember the old saying, "Taxes are the price we pay for a civilised society." Keep contributing — to creativity and to society."

New side hustle tax rules will apply from January 1, 2024. Apps and websites will be required to tell HMRC about earnings of their users - including Air BnB and Etsy.

HMRC is employing 24 people and deploying £40million to catch side hustle earners who do not pay their taxes.

It does not say but could also include Ebay.

eBay mentioned on this site:

"The rules affect websites and apps like Vinted, eBay, Depop, Etsy, Uber, Airbnb and JustPark. It means holiday rental hosts, delivery drivers, people who buy and sell clothes and other items using online marketplaces, and those who sell homemade crafts online, will be impacted."
https://moneyweek.com/personal-finance/tax/hmrc-crackdown-on-workers-who-earn-extra-income

thanks AG. I think a lot of people sell on Ebay but if it is only small amounts it will take a while to reach £1000. the important thing now is to keep the accounts. If you sell not only writing down the amount you sell for but also , against that the costs. As it looks as though the people like Etsy and Ebay will eventually be asked to provide accounts (smacks of big brother doesn't it?) It would be very wise to take it seriously and keep records.

I can remember being bored ridged, back in the 70’s, going through local papers to see if I could spot regular sellers in the for sale columns ( VAT)

Someone suggested to me, that I should open an Ebay account and sell my homemade cards etc and I said, but this is a small hobby and I'm not going to start running a business!

I sold a few at the local xmas fayres and not selling anywhere else.

Anyone who is reg selling online and making money is clearly running a business and they should be declaring their income and where appropriate paying the taxes.

if you were having a clear out and selling a few things as a one off, I think that is acceptable.

But I am sure there are thousands of people selling online everyday day who think/thought they would escape HMRC!

Yes I agree with you Florence.

I would add that this is extra cash on top of their normal income, such as a pension or full time job.

If you don't pay tax on your regular income, then you can use up the rest of your personal allowance on your on-line selling plus the £1000 extra.

Keeping accounts is vital - the £1000 is profit, not income. They don't have to be complicated - just a simple list of what you spend on materials etc. and what you sell the finished articles for.