Side Hustle Tax Question

Dazed_and_C0nfused

Simpleg87 said:

Thanks for the replies so far. I've spent many hours trying to find out the answer on Google to no avail. I think what is confusing me is that I already have to do a self assessment for paying back higher rate child benefits so is the suggestion to undertake a second self assessment tax return for the side hustle and then just file that as a loss and carry that forward? 

What amazes me is there must be alot of people in this situation and yet there seems to be very little guidance for people. Even HMRCs website doesn't help or provide guidance it just tells you about the need to file a tax return for sales on ebay. With the change in implementation rules ie digital sales flagging to HMRC automatically there are thousands of hobby businesses that will need to file their returns. 

I'm not registered as a sole trader other than because it's automatically being sent to hmrc via eBay sales and I'm definitely not listed via companies house. 

The issue to make it clear is - I owe child benefit back as I am a higher rate tax payer so have to fill out the self assessment forms and have an account linked to my national insurance number. Ebay have my national insurance number due to changes in their digital sales system and will have flagged to HMRC that my ebay sales have gone over the threshold for paying tax on profits (except I've generated a loss). Because it's linked to my national insurance number I'm not sure I can post 2 tax returns and therefore it's going to come off my PAYE earnings? 

I also have the issue that I still can't get my head around which is year 1 post a loss and carry that forward... I doubt I will make profit ever and I'm not sure what will happen longer term other than having to stop doing it? 

You do not file two Self Assessment returns for a tax year.  You file a single return.  Which might contain different pages, for example employment, self employment, land and property, partnership etc.

There is also no requirement to file a tax return simply because you sell things on eBay. 

Have you considered getting professional advice?

LITRG

Hello, we have lots of information about finding a tax adviser, side hustles, how to complete a tax return and losses on our website: https://www.litrg.org.uk/working/self-employment/calculating-self-employed-profits/trading-losses
Hope helpful. Thanks