Earlier this year the government announced that up to 300,000 people would no longer need to file a tax return, a particularly welcome piece of news for anyone with a side hustle.
However, this is not the same as there being no tax to pay on the money received, as the Clayton & Brewill team explain in this blog.
Who will be affected by this change?
The government is changing the way HMRC works to “make it easier for Brits to make the very most of their entrepreneurial spirit” by introducing a new system where some individuals will not have to file a tax return.
This change will be especially welcomed for those looking to make some extra income alongside their main career, such as those making money by selling things on eBay, dog walking or creating content online.
How this is going to work
While this may seem like a simple change, not having to file a tax return will not be the same as there being no tax to pay. There are two allowances of £1000 each, which can be set against trading and property income, but income from a side hustle above this level is likely to be taxable.
The government has proposed to put up the Income Tax self-assessment reporting threshold for trading income from £1000 to £3000. HMRC expects that although 300,000 people may not need to file a return, 210,000 of them will still need to pay tax. The plan for this will be to pay tax through a new online HMRC service which is yet to be revealed.
Keeping up to date
With taxes and payment methods often changing it can feel overwhelming to keep up to date with the latest updates and ensure you are making the correct payments. Get in touch with the Clayton & Brewill team to help you keep track of your tax payments and understand the latest updates.
