As part of a package to transform HMRC into a quicker, fairer and more modern body, plans have been announced to increase the Income Tax Self Assessment (ITSA) reporting threshold for trading income, from £1,000 to £3,000 gross within this parliament.
What this means is that if you sell on eBay or similar platforms you will not have to report your income until it gets to £3,000. This doesn’t change the requirement to pay tax on anything earned over £1,000, but by raising the reporting threshold it will take some 300,000 people with side hustles out of the need to complete a full tax return. To simplify the complex tax return system, the government said a new online form will be introduced to declare cash earnings up to £3,000 for self-employed work
From trading old games to creating content on social media, we are changing the way HMRC works to make it easier for Brits to make the very most of their entrepreneurial spirit.
Taking hundreds of thousands of people out of filing tax returns means less time filling out forms and more time for them to grow their side hustle.
We are going further and faster to overhaul the way HMRC works to make sure it delivers the Plan for Change that will help put more money in people’s pockets.
– James Murray, Tax minister
The Treasury said the threshold increase will benefit about 300,000 taxpayers, with an estimated 90,000 of those not having to pay any tax or having to report their trading income to HMRC in the future.
It said 98% of those 300,000 are self-employed and report small trading incomes, while 2% report income from property.
This will be welcome news for thousands of UK sellers for whom eBay is a side hustle and a means of supplementing their household income during challenging times.
By removing the paperwork associated with selling online, hopefully we will help these side hustles grow into fully fledged small businesses.
– Eve Williams, CEO, eBay UK
