Stay Compliant with HMRC: What You Need to Know About Additional Income

As more UK taxpayers engage in side hustles—like selling on eBay, renting out properties on Airbnb, or creating art on Etsy—HM Revenue & Customs (HMRC) is stepping up efforts to ensure everyone accurately reports their income. A new initiative requires digital platforms to report how much individuals earn through their sites, increasing the chances of discovering undeclared income.

What Counts as Additional Income?

If you earn £1,000 or less in additional income per year, you don’t need to worry—this amount falls under the annual trading allowance. However, if your earnings exceed this limit, you should register as self-employed and keep accurate records for tax reporting.

How Does HMRC Gather Information?

HMRC uses a sophisticated data-matching platform called Connect, which analyses information from over 30 databases, including tax returns, bank accounts, and even social media. With 55 billion items of taxpayer data, the chances of undeclared income being spotted are quite high.

Minimise Your Risk of an Investigation

To avoid potential investigations, maintain thorough records of all your income and consider making a voluntary disclosure if you have undeclared earnings, as this approach is viewed favourably by HMRC.

 Let Us Assist You!

If you have questions about your income sources or need help navigating your tax planning, don’t hesitate to get in touch. We are here to ensure your records are in order and to guide you through any disclosures if needed.