HMRC is set to intensify its efforts to collect tax from individuals earning extra income through side hustles, with new rules taking effect from January 1. The tax authority has instructed popular platforms such as Airbnb, Fiverr, Upwork, Uber, Deliveroo, and Etsy to record earnings and report them directly to HMRC.
This move is part of a broader crackdown on tax avoidance among those supplementing their income via side hustles, freelancing, or self-employment. Currently, anyone earning over £1,000 alongside their main job in a tax year must register as self-employed and report their income to HMRC, paying the appropriate tax.
The new rules aim to identify discrepancies between platform-reported earnings and individual tax returns, enabling HMRC to launch investigations where under-reporting is suspected. HMRC is investing nearly £37 million and hiring 24 full-time staff to enforce these measures, which are designed to “bear down on, detect, and tackle tax evasion.”
Seb Maley, CEO of tax insurance provider Qdos, warned that the legislation has “flown under the radar” but will have significant implications for those using platforms like Airbnb, Upwork, or Uber. “HMRC doesn’t trust the growing number of people with side hustles to accurately report their earnings, so it will go directly to the platforms,” he said. “If the numbers don’t add up, HMRC has everything it needs to launch a tax investigation.”
Individuals with side hustles are urged to ensure they are tax-compliant. Those who need to register for self-assessment can do so online via the Gov.uk website or by calling the self-assessment helpline on 0300 200 3310.
