Martin Lewis explains new tax rules to anyone making money with online side hustles

Martin Lewis on Wednesday explained the new HMRC rules to anyone making money by selling on sites like eBay, Vinted, or Airbnb.

The MoneySavingExpert.com (MSE) website founder wrote On X/Twitter: “In brief, there is no new tax. Unless you are ‘trading’, selling your old stuff isn’t taxed.

“Only sales over £1,700 or more than 30 items a year are reported.”

The money-saving expert assured online sellers that he would “put their mind at rest” following the implementation of new rules requiring websites to share their details with the government.

Starting from 1 January, websites and apps that facilitate users in earning money through selling or renting are required to report the earnings made by their users to His Majesty’s Revenue and Customs (HMRC).

On MSE website, an article that Mr Lewis shared on X, read: “The platforms will have to start automatically sharing this information with HMRC by 31 January 2025 – the first lot of data-sharing will cover the current 2023/24 tax year, which is why it’s worth getting on top of it now.

“Previously, HMRC was able to access sellers’ information from UK-based online platforms when required. The new, automatic data-sharing process, which also covers overseas platforms, is being implemented after the UK signed up to rules by the international Organisation for Economic Co-operation and Development, which aim to tackle tax evasion globally.”

MSE added: “If all you’re doing is selling goods online, firms will ONLY pass on data to HMRC automatically if you’re selling 30 or more items a year OR have total earnings over the equivalent of €2,000 (currently around £1,700) – so if you’re doing a lot less than that, it isn’t an issue. However, it’s worth noting you may still have to pay tax if you earn £1,000 or more from selling.”

The new measures don’t apply to cashback sites, such as Quidco and Topcashback, as cashback is not taxable, he said.

“It’s important to note that the rules around who pays tax on earnings made from digital platforms have NOT changed. If you didn’t owe any tax on these earnings before, and you continue to use these platforms the same way, you won’t have to start paying tax on them now,” the MSE website added.

“What has changed is that HMRC will be able to find out what people are making on digital platforms more easily, so now is a good time to check if you owe tax or if you may do so for future earnings.”

The change also means that HMRC can share this data with tax authorities in other countries that are signed up to the new rules, and vice versa.

“So if you are living in the UK and making money on a platform that’s based in another country, the tax authority in that country will be able to let HMRC know about this. It’s not clear yet which countries are signed up, though it’s expected to include most EU member states.”