As Valentine’s Day approaches, anyone who has turned the love for their hobby into a side hustle is being encouraged to ‘put a ring on it’ and make it official.
Whether it’s making extra income from activities such as online content creation, dog walking, or making handcrafted items to sell, HMRC has launched a new Help for Hustles campaign to assist people in understanding if they need to declare their earnings.
Anyone generating more than £1,000 from their side hustle should check their tax obligations using HMRC’s new easy-to-use guide at taxhelpforhustles.campaign.gov.uk.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, said:“We know many people are turning their hobbies and interests into successful businesses and we’re here to help them understand their tax obligations.
“Nobody wants an unexpected tax bill, so anyone with a side hustle should check HMRC’s straightforward guide and make sure they’re getting their tax right.”
The new guide covers five key areas to help people understand any tax obligations:
This only applies to people who are trading or selling services. If someone is simply clearing out their unwanted items and putting them up for sale, they will not need to pay tax.
Undeclared income of more than £1,000 from side hustles form part of the hidden economy. HMRC is committed to reducing the tax gap, of which the hidden economy accounted for about £2.2 billion in 2022/23.
The true cost of tax evasion is likely being vastly underestimated, as loopholes in the current system make it all too easy for fraudulent behaviour to go unchecked. In a report released today, the Public Accounts Committee (PAC) is calling for a clear strategy to tackle tax evasion and increased powers for public bodies to address fraud.
HMRC estimates that tax evasion cost £5.5 billion in lost revenue in 2022-23, 81% of which could be attributed to small businesses. But the introduction of legislation in 2021 making online marketplaces liable for VAT from overseas sellers led to £1.5bn in additional taxes per year, five times greater than HMRC predicted.*
The PAC is therefore concerned HMRC may have underestimated the level of evasion occurring and is calling on HMRC to assess the reasons behind this gap. The report is concerned by the lack of curiosity shown by HMRC to investigate the issue, further noting that its inquiry heard that anywhere between 5% and 20% of UK registered companies were fraudulent in 2023.
Despite the vast sums lost, HMRC does not have a clear objective or strategy to tackle tax evasion. The issue appears to be exacerbated by a lack of collaboration to date between HMRC, Companies House and the Insolvency Service.
The PAC is calling for HMRC to set out a clear strategy for tackling evasion and deliberate non-compliance, while noting that the current planned timeline of five to ten years to tighten company registration requirements is too far in the future.
The introduction of the Economic Crime and Corporate Transparency Act 2023 granted Companies House greater powers to clean up the company register and remove fraudulent information.
With identity verification set to become mandatory by autumn 2025, it is clear steps are being taken in the right direction. But the PAC is concerned measures are not strong enough, as Companies House is still unable to verify addresses of registered companies, which the PAC fear will mean it shall remain all too easy for registrations for fraudulent means to continue.
The PAC was disappointed to learn that HMRC has continued to bombard a taxpayer in Cardiff with letters seeking unpaid tax as a result of businesses fraudulently registering their home address for VAT purposes, despite the Committee having pressed this issue for over a year.
The PAC fear this case unfortunately illustrates a wider issue of HMRC’s VAT registrations processes being far too open to abuse, with the tax authority not exploring options to tighten controls.
The number of prosecutions resulting from HMRC’s criminal investigations reduced from 749 in 2018-19 to 344 in 2023-24. During the same period, the Insolvency Service disqualified just 7 directors for phoenixism.
The PAC notes that it does not appear that the mechanisms in place bear down on tax evaders and rogue directors who flout insolvency rules are being used to their fullest extent.
Sir Geoffrey Clifton-Brown MP, Chair of the Committee, said: “It is of deep concern that the many billions in tax rightfully meant for the public purse could just be the tip of the iceberg.Not only that, but our own tax authority has not sufficiently curious with a view to accurately diagnosing the problem.
“Though we acknowledge the inherent difficulty of the issue, it is clear that more must be done to clamp down on fraud and root out the bad actors who are taking advantage of loopholes in the current system. It is unfair on those who abide by the rules to be undercut by those that are evading their obligations. There has to be a real willingness by those in charge of Companies House to effectively use the powers they’ve been given.
“It is heartening to know that work is being done to implement a more joined up approach across public bodies. However, large roadblocks remain in place that will inevitably slow down progress, and in some cases may stall it completely.
“It is also unclear how successful any effort will be in the absence of a clear strategy with measurable outcomes to tackle tax avoidance. Government needs to get a tighter grip on this issue to prevent further tax funds being lost unnecessarily.”
Only two months left to boost State Pension by filling gaps in National Insurance records from 2006 onwards
Since the launch of the digital service last April, 37,000 people have topped up more than 68,000 years, worth £35 million
People wanting to maximise their State Pension by plugging gaps in their National Insurance record have contributed to a total of 68,673 years, worth £35 million, using the online service since April last year HM Revenue and Customs (HMRC) has revealed.
Analysis of the digital service has shown:
more than 37,000 online payments have been made through the service
65% of the years topped up by customers are from 2017 onwards
the average online top-up payment is £1,835
the largest weekly State Pension increase is £113.76
HMRC and Department for Work and Pensions (DWP) are reminding customers they only have 2 months up until 5 April to check their National Insurance record and fill any gaps from 6 April 2006 onwards.
From 6 April 2025, people will only be able to make voluntary National Insurance contributions for the previous 6 tax years, in line with normal time limits.
The Check your State Pension forecast service on GOV.UK is the quickest and easiest way customers can check what their pension will be in retirement and take action if they need to. People can also use the HMRC app to check their State Pension forecast.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive, said:“There are just 2 months left to check and fill any gaps in your National Insurance record from 2006 onwards to boost your State Pension entitlement.
“Don’t delay – it is quick and easy to check your National Insurance record on GOV.UK and it could help your finances in retirement.”
Since the launch of the enhanced digital service in April last year, more than 4.3 million people have used it to check their State Pension forecast.
The end-to-end service means customers can also use it to check and view gaps in their National Insurance record, calculate the difference any payment will make to their State Pension and then make one payment for however many years they need to top up.
Everyone should be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone. HMRC scams advice is available on GOV.UK.
11.5 million file Self Assessment by 31 January deadline
More than 11.5 million taxpayers filed their Self Assessment tax return by midnight on 31 January.
97.36% of tax returns were filed online.
90.53% of expected filers filed their Self Assessment.
More than 11.5 million taxpayers beat the Self Assessment deadline to file their tax return for the 2023 to 2024 tax year by 31 January and avoid a £100 late filing penalty, HM Revenue and Customs (HMRC) can reveal.
The number of people who filed their return on deadline day was 732,498, with the most common time being 16:00 to 16:59 when 58,517 people filed. Thousands left submitting their return until the very last minute when 31,442 filed between 23:00 and 23:59.
HMRC is urging anyone who has missed the deadline to file their tax return now and pay any tax owed. One of the quickest ways to pay is via the free and secure HMRC app. Time to Pay arrangements are available for those who cannot pay their tax bill in full. Late filing and late payment penalties are charged for failure to meet the deadline.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:“Thank you to the millions of people and agents who filed their Self Assessment tax return and paid any tax owed by 31 January.
“I’m urging anyone who missed the deadline, to submit their return as soon as possible to avoid any further penalties. Search ‘Self Assessment’ on GOV.UK to find out more.”
The penalties for filing a tax return late are:
an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
after 12 months, another 5% or £300 charge, whichever is greater
There are also additional penalties for paying late – 5% of the tax unpaid at 30 days, 6 months and 12 months. Interest will also be charged on any tax paid late.
If someone regularly sells goods or provides services through an online platform, they may need to pay tax on their income.
3.4 million Self Assessment returns still to be filed before 31 January deadline – those who miss the deadline risk £100 penalty
Customers urged to go online for help and advice
Payment for outstanding tax also due by 31 January
With only a week left until the Self Assessment deadline 3.4 million customers are yet to file their 2023 to 2024 tax return. And HM Revenue and Customs (HMRC) is warning them to file now or risk missing the 31 January deadline – and getting a £100 penalty.
More than 66% (8.6 million) have already filed their tax return. Those who are yet to start can go to GOV.UK to find all the support and guidance they need at their fingertips including live webinars, video tutorials as well as plenty of online help sheets.
Once customers have submitted their return, the quickest and easiest way to pay any tax due is via the free and secure HMRC app, which takes less than a minute with immediate confirmation of payment. Nearly 360,000 have paid their Self Assessment tax bill via the app since 6 April 2024, totalling more than £605 million.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Time is running out for the millions still to file their Self Assessment tax return by 31 January. Help and support is available for those who have not yet started their return. Visit GOV.UK and search ‘Self Assessment’ to find out more.”
It’s important customers always include their bank details as part of their tax return to ensure that if there’s any repayment due, it can be done quickly and securely.
Customer’s reasons for not paying their tax bill or arranging a payment plan by the deadline will be considered individually. While customers who provide HMRC with a reasonable excuse may avoid a penalty, those without reasonable excuse face will be issued with a penalty including:
an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
after 12 months, another 5% or £300 charge, whichever is greater
There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months. If tax remains unpaid after the deadline, interest will also be charged on the amount owed, in addition to the penalties above.
Customers need to be aware of the risk of falling victim to scams and should never share their HMRC login details with anyone, including a tax agent, if they have one. HMRC scams advice is available on GOV.UK.
Almost 25,000 taxpayers ‘celebrated’ the New Year by filing their Self Assessment tax return
If customers miss the 31 January deadline, they could face a penalty
With less than a month to go, the countdown is on for 5.4 million customers who still need to complete and pay their Self Assessment and avoid penalties, HM Revenue and Customs (HMRC) warns.
Thousands of taxpayers have already done so by completing their tax returns before the fizz was barely flat on New Year’s Day. HMRC can today reveal more than 24,800 people filed on 1 January. A further 38,000 had even squeezed theirs in before the bells on 31 December, with 310 filing between 23:00 and 23:59.
Filing your tax return and paying on time plays an important role in supporting public services and the government’s Plan for Change, which is delivering economic stability and investment across the UK. Anyone who is yet to file their tax return can do so online, via GOV.UK.
Anyone required to file a tax return for the 2023 to 2024 tax year who misses the 31 January 2025 deadline could face an initial late filing penalty of £100.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We know completing your tax return isn’t the most exciting item on your New Year to-do list, but it’s important to file and pay on time to avoid penalties or being charged interest.
“The quickest and easiest way to complete your tax return and pay any tax owed is to use HMRC’s online services – go to GOV.UK and search ‘Self Assessment’ to get started now.”
Some 97% of customers now file online and one benefit is that they don’t have to complete it all in one go – they can save what they have done and pick it up again later.
Once a tax return is filed, payments can also be made quickly and securely through the HMRC app. Customers can set up notifications in the app to remind them when payments are due, so they don’t need to worry about missing deadlines or penalties.
For people who can’t meet the tax return deadline, HMRC will treat those with reasonable excuses fairly if they tell us before 31 January.
The penalties for late tax returns are:
an initial £100 fixed penalty, which applies even if there is no tax to pay, or if the tax due is paid on time
after 3 months, additional daily penalties of £10 per day, up to a maximum of £900
after 6 months, a further penalty of 5% of the tax due or £300, whichever is greater
after 12 months, another 5% or £300 charge, whichever is greater
There are also additional penalties for paying late of 5% of the tax unpaid at 30 days, 6 months and 12 months. If tax remains unpaid after the deadline, interest will also be charged on the amount owed, in addition to the penalties above.
If someone regularly sells goods or provides services through an online platform, they may need to pay tax on their income. Customers can find out more about selling online and paying taxes on GOV.UK by searching ‘online platform income’ or by downloading the HMRC app.
The guidance will help them decide if their activity should be treated as a trade and if they need to complete a Self Assessment tax return.
You also may need to file a return if you:
are newly self-employed and have earned gross income over £1,000
earned below £1,000 but wish to pay Class 2 National Insurance Contributions voluntarily to protect your entitlement to State Pension and certain benefits
are a new partner in a business partnership
have received any untaxed income over £2,500
receive Child Benefit payments and need to pay the High Income Child Benefit Charge because you or your partner earned more than £50,000
Criminals use emails, phone calls and texts to try to steal information and money from taxpayers. Before sharing personal or financial details, people should search ‘HMRC tax scams’ on GOV.UK to access a checklist and help decide if the contact received is a scam.
4,409 Self Assessment customers completed their tax return on Christmas Day
40,072 filed their tax return over the Christmas break
Customers encouraged to prepare and file their tax return ahead of January deadline
More than 4,400 Self Assessment customers avoided peeling the sprouts to file their tax return online on Christmas Day, HM Revenue and Customs (HMRC) can reveal.
In total, 40,072 customers – as well as spending the three-day holiday indulging in usual Christmas pastimes of eating, drinking and watching festive favourites on the TV – found time to go online and wrap up their 2023 to 2024 tax return, well ahead of the 31 January deadline.
Festive filing statistics show that over Christmas Eve, Christmas Day and Boxing Day:
15:00 to 15:59 proved to be the most popular time to file on the big day itself, with 368 filing their return
11,932 customers missed out on leftovers for lunch, submitting their tax return on Boxing Day, with the most popular time being 16:00 to 16:59 and 1,108 filing during that time.
23,731 filed on Christmas Eve instead of last-minute shopping and wrapping. The most popular time was 11:00 to 11:59 when 3,458 filed their tax return
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “People who need to file a Self Assessment return and already have, can enjoy the rest of the festive period knowing they’ve got it wrapped up for another year, and can enjoy singing Auld Lang Syne knowing their tax affairs are in order.
“For those who haven’t started yet, our online service is available 365 days a year so there’s still a chance to get it done before 2024 is out! Go to GOV.UK and search ‘Self Assessment’ to access the online help and start today.”
Customers who have already submitted their tax return online have until the 31 January 2025 to pay the tax they owe. Those who file before 30 December may have the option of paying any tax owed through their PAYE tax code.
The quickest and easiest way to pay a Self Assessment tax bill is via the HMRC app. For a full list of ways to pay, visit GOV.UK.
For anyone who is yet to start their Self Assessment, there’s plenty of information and guidance online, including YouTube videos, to help people complete their return.
Anyone who regularly sells goods or provides a service through an online platform can find out more about selling online and paying taxes on GOV.UK. The information will help them decide if their activity should be treated as a trade and if they need to complete a Self Assessment tax return.
You may need to file a return if you:
are newly self-employed and have earned gross income over £1,000
earned below £1,000 and wish to pay Class 2 National Insurance Contributions voluntarily to protect their entitlement to State Pension and certain benefits
are a new partner in a business partnership
have received any untaxed income over £2,500
receive Child Benefit payments and need to pay the High Income Child Benefit Charge because they or their partner earned more than £50,000
Criminals use emails, phone calls and texts to try to steal information and money from taxpayers. Customers can find more information on how to identify a scam and access a checklist to help them decide if the contact they have received is a scam, on GOV.UK
Festive workers, including those on short-term contracts, are being urged to check their pay to make sure they aren’t missing out on the National Minimum Wage or National Living Wage.
Seasonal staff and students employed over the Christmas period are legally entitled to receive at least the same minimum rates as other workers.
HM Revenue and Customs (HMRC) is reminding all workers to check their hourly rate of pay, and to look out for unpaid working time – such as time spent cleaning and closing premises, training, or picking up extra hours.
Deductions, for things like uniforms or tools, can also reduce pay rates.
“No matter how long you’ve been employed for, you are legally entitled to be paid at least the National Minimum Wage. This includes temporary seasonal staff working in shops, hotels, garden centres, Christmas markets, restaurants and warehouses.
“Always make sure that you check your pay and look out for any deductions, or unpaid working time that could take you below the minimum wage.
“If you think you’ve been short changed, even if you no longer work for that employer, we’re here to help. Visit GOV.UK and search ‘check your pay’ to find all the information you need about wage rates, and how to report your employer if they’re not paying you correctly.”
The National Minimum Wage hourly rates are currently:
£11.44 – Age 21 and over (National Living Wage)
£8.60 – Age 18 to 20
£6.40 – Age under 18
£6.40 – Apprentice
Anyone not being paid what they are entitled to, or people concerned that someone they know may not be getting paid correctly, can report it online at https://www.gov.uk/minimum-wage-complaint. It takes around 10 minutes and reports can be made after the employment has ended.
To speak with someone, raise a concern or get further information, phone the Acas Pay and Work Rights helpline on 0300 123 1100 for confidential, free advice (Monday to Friday*, 8am to 6pm).– *Except Bank Holidays.
Employers can also access support at any time to ensure they are paying their workers correctly:
view the online employers’ guide on calculating the minimum wage
Self Assessment customers unable to pay their tax bill in full by 31 January 2025 can spread the cost using HMRC’s online Time to Pay system
Time to Pay plans support those who cannot pay their tax bills on time by arranging regular monthly payments in return for avoiding any further late payment penalties
Online payment plans can be set up for tax bills up to £30,000, without the need to contact HMRC directly
With Christmas preparations well underway in many households, considering financial commitments may be on the agenda. So HMRC is reminding people who pay tax by Self Assessment of the opportunity to spread the cost of their bill.
More than 15,000 Self Assessment customers have already set up a Time to Pay payment plan for the 2023 to 2024 tax year to help spread the cost, and there is still an opportunity to sign up for such an arrangement.
HM Revenue and Customs (HMRC) offers these payment plans to support customers unable to pay their tax bill in full and looking to manage their tax payments over regular monthly instalments.
The online deadline to file a tax return for the 2023 to 2024 tax year and pay any tax owed is 31 January 2025. Anyone who is unable to pay their tax bill in full, owes less than £30,000 and is eligible, can quickly and easily apply online without the need to contact HMRC directly. Those that owe more than £30,000 are still able to apply but would need to contact HMRC.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “We’re here to help customers get their tax right and if you are worried about how to pay your Self Assessment bill, help and support is available.
“Customers can set up their online payment plan to suit their own financial circumstances and can spread those payments across a maximum of 12 months. It is a valuable option for someone needing extra flexibility in meeting their tax obligations.”
Taxpayers must file their Self Assessment tax return before setting up a Time to Pay arrangement.
There are many ways in which people can pay their Self Assessment tax bill, including paying through the free and secure HMRC app or online at GOV.UK. A full list of payment options can be found on GOV.UK. There is also a video on YouTube that explains a customer’s Self Assessment tax bill and the different ways to pay.
HMRC is encouraging people to be prepared and have all the information they need ready to file their Self Assessment tax returns early, so they can avoid any last-minute stress and know what they owe sooner. HMRC has a range of online help and support and YouTube videos to assist anyone completing their return, including first-time filers.
Customers setting up a time to pay arrangement need to budget accordingly to ensure that regular monthly payments can be made. Any missed payment will incur interest as well as a penalty.
HMRC recommends that anyone who regularly sell goods or provides a service through an online platform to find out more about selling online and paying taxes. The information on GOV.UK will help them decide if their activity should be treated as a trade and if they need to complete a Self Assessment tax return.
Criminals use emails, phone calls and texts to try to steal information and money from taxpayers. Before sharing their personal or financial details, people should search ‘HMRC tax scams’ on GOV.UK to access a checklist to help them decide if the contact they have received is a scam
People should never share their HMRC login information with anyone. Someone could use them to steal from them or claim benefits or a refund in their name.
Simple Assessment
HMRC is also reminding anyone who received a Simple Assessment letter that the deadline to pay any tax owed is 31 January 2025. Simple Assessment customers do not need to register and complete a tax return.
Simple Assessment letters were issued to those who have unpaid Income Tax from the 2023 to 2024 tax year that cannot be collected via Pay as You Earn (PAYE) – by an employer or pension provider.
Customers who receive a Simple Assessment on or after 31 October 2024 for tax owed during 2023 to 2024 tax year will have 3 months from the date of their assessment to pay their tax bill.
Both Self Assessment and Simple Assessment payments can be made in full, or in smaller amounts if the balance is cleared before the deadline. Payments can be made on GOV.UK or through the HMRC app.
People selling unwanted items online can continue to do so with confidence and without any new tax obligations, HM Revenue and Customs (HMRC) has confirmed.
The reminder comes as online platforms start sharing sales data with HMRC from January 2025 – a new process that, when announced last year, generated inaccurate claims that a new tax was being introduced.
But whether selling last year’s festive jumper, getting some money back for a child’s outgrown baby clothes, or quietly offloading an unwanted Christmas present or two – absolutely nothing has changed for online sellers.
For anyone who is unsure if their additional income could be taxable just search ‘online platform income’ on GOV.UK to use HMRC’s free online tool or download the HMRC app and go to the ‘news’ section under the ‘communication’ tab for more information.
Angela MacDonald, HMRC’s Second Permanent Secretary and Deputy Chief Executive Officer, said:“We cannot be clearer – if you are not trading and just occasionally sell unwanted items online – there is no tax due.
“As has always been the case, some people who are trading through websites or selling services online may need to be paying tax and registering for Self Assessment.”
The new reporting requirements for digital platforms came into effect at the start of 2024. It is not a new tax and whether people are selling personal items on eBay, renting homes out on Airbnb or delivering takeaways through Just Eat – no tax rules have changed.
Those who sold at least 30 items or earned roughly £1,700 (equivalent to €2,000), or provided a paid-for service, on a website or app in 2024 will be contacted by the digital platform in January to say their sales data and some personal information will be sent to HMRC due to new legal obligations.
The sharing of sales data does not automatically mean the individual needs to complete a tax return.
However, those who may need to register for Self Assessment and pay tax, include those who:
buy goods for resale or make goods with the intention of selling them for a profit
offer a service through a digital platform – such as being a delivery driver or letting out a holiday home through a website
AND generate a total income from trading or providing services online of more than £1,000 before deducting expenses in any tax year
HMRC wants to help people get their tax right. Anyone unsure whether to complete a Self Assessment tax return for the 2023 to 2024 tax year or not, can check on GOV.UK. If new to Self Assessment, they can register on GOV.UK.
HMRC is working alongside online platforms to ensure sellers receive clear guidance on their tax responsibilities.
