Additional income changes

Worriedandalone

Apologies if this has been asked elsewhere, I have searched the forum but ended up down a rabbit hole and perhaps the search terms weren’t correct.

We’ve never given this much consideration before but lots a talk and scaremongering on social media has caused us to look at it further and perhaps it’s not scaremongering. It appears that HMRC have changed tax rules this week to capture the people making additional incomes through “side hustles”. We hadn’t put ourselves in that bracket but now thinking we could be captured amongst it and would want to ensure we are doing things correctly.

My wife is a bit of an eBay fiend and has been selling on eBay for a number of years. The vast majority of things sold are personal items such as clothes and toys that our children no longer use. However, in additional there is a minority of things that my wife will pick up in charity shops or car boot sales which she may reconsider when she gets home or purchase with a view to “make a couple of quid”.

Totalling up her sales over the last year we are looking at approx £3500 total which sounds a lot but this is before any fees or postage is deducted. Things also soon add up when some items can be £40 or £50 and she also sells things on behalf of family members since she knows what she’s doing and gives them the proceeds.

If we were to total the moment made from what could be perceived to be “trading” (I.e the “I’ll make a few quid from that” purchases) I think we would be under the £1000 threshold that seems to be thrown around and certainly under the £2000 if we we to say we would get £1000 each. 

However, my worry is that it would be very difficult to now prove it. This is all completed on a the basis of putting excess things on eBay to clear space and not run like a business with profit and loss columns, detailed inventories etc that we could evidence to the tax man. We’ve never separated “trading” from personal sales and this would be very hard yo do. 

Should we be registering for a tax return going forward in order to be cautious or are we unlikely to get caught up amongst these new rules?

SiliconChip

This may get included in the next MSE Weekly email (which is due to arrive this evening), but there are various other places you can read about it, here's one that I found https://www.gosimpletax.com/blog/hmrc-crackdown-to-target-side-hustle-income-earners/

I certainly think it would be sensible for your wife to document her sales in future, along with any expenses that she might be able to claim. She might not have to declare anything, but if she does then good record keeping is vital.

SiliconChip

As I thought, it is in the weekly email, and contains some potentially useful links to determine whether you need to report the income to HMRC.

https://www.moneysavingexpert.com/news/2024/01/online-platforms-etsy-vinted-airbnb-report-hmrc/  

moneysavingnovice999

Is there an overlap with Capital Gains Tax allowance in HMRC rules?  CGT allowance is £6000 and the scope includes "personal possessions".  Items with lifespan under 50 years (e.g. clocks & watches) and all machinery are exempt.

moneysavingnovice999

Ah, no - CGT is for individual items where you have gained over £6000, as the MSE article explains.  Sorry!

cardriver98

play safe and declare .  ebay have ALL records of buying and selling. ive just had my December account.