Many of us use online trading platforms to sell unwanted goods or perhaps offer space in our home for rental.
If you are creating income in this way and you are earning more than £1,000 from this activity in any one tax year, then you will need to declare these earnings to HMRC.
This issue is likely to become a hot topic as from 1 January 2024 HMRC will be collecting data from the trading platforms and using this data to identify traders who have not declared their earnings.
HMRC’s manual on this topic says:
“The reporting rules commence in the United Kingdom on 1 January 2024.
“Platform operators that are within the scope of the rules will have to start conducting the due diligence, record keeping, and other obligations specified in the regulations from 1 January 2024.
“The required information must be reported by 31 January following the end of the reporting period. This means the reports for the first Reportable Period of 1 January 2024 to 31 December 2024 will be due by 31 January 2025.”
Which means your online sales details will now be reported to HMRC by the individual trading platforms and if HMRC check to see if actual returns from taxpayers do not seem to agree with the data received from eBay, Amazon, Airbnb etc., then enquiries will ensue.
It’s worth underlining that if your online sales do not breach the £1,000 tax-free limit in any tax year, then you should have no reporting obligations. But please note, this £1,000 limit is not for each trading platform but for all your online sales revenues.
If you need to clarify if your online income is reportable, please call and we will help you decide if you need to make any declarations to HMRC.