Published by Gbaf News
Posted on January 5, 2018
Renting out property on Airbnb or selling second-hand goods on sites like eBay and Gumtree could land people in hot water with the taxman, unless they check whether they need to file a Self Assessment tax return (the deadline of which is 31st January 2018) – according to one of the UK’s leading online accounting software providers.
FreeAgent – who provide innovative cloud accounting software to freelancers and micro-businesses – warns that many people across the UK could be risking being fined by HMRC due to not realising they should be paying income tax on money they earn “on the side”.
Now that the deadline for registering for Self Assessment has passed, FreeAgent is urging anyone who rents property on websites like Airbnb or regularly sells items in online second-hand marketplaces to check whether they meet HMRC’s “badges of trade” and, therefore, need to pay tax on this income. It is now estimated that the average Airbnb host makes at least £3,000 per year, with 50,000 people currently hosting in the UK.
If these individuals meet HMRC’s “badges of trade”, they will need to register for Self Assessment as soon as possible, and then file their tax return before the January 31st 2018 deadline for submissions – or else receive a £100 fine from HMRC, and risk further penalties for not paying the tax they owe.
During the last Self Assessment season, 840,000 people (14% of taxpayers) failed to submit their tax return before the January 31st 2017 deadline; leading to automatic £100 fines from HMRC.
Ed Molyneux, CEO and co-founder of FreeAgent, said: “With the rise of the sharing economy and the increase in the number people making regular sales on sites like eBay and Gumtree – as well as renting out property on Airbnb – many people are making money outwith their usual work. Therefore, HMRC looks at a range of factors to determine whether a person is ‘trading’ or not and whether they need to pay tax on that income.”
“Many people in the UK may be currently unaware that they actually have to file a Self Assessment tax return, so it’s vital that everyone checks whether the money they make is taxable income or not.”
“By reviewing any ‘on the side’ cash you accumulate against HMRC’s badges of trade, you’ll be able to tell whether you need to register for Self Assessment and file a tax return – and avoid any nasty surprises from the taxman in the future.”
Renting out property on Airbnb or selling second-hand goods on sites like eBay and Gumtree could land people in hot water with the taxman, unless they check whether they need to file a Self Assessment tax return (the deadline of which is 31st January 2018) – according to one of the UK’s leading online accounting software providers.
FreeAgent – who provide innovative cloud accounting software to freelancers and micro-businesses – warns that many people across the UK could be risking being fined by HMRC due to not realising they should be paying income tax on money they earn “on the side”.
Now that the deadline for registering for Self Assessment has passed, FreeAgent is urging anyone who rents property on websites like Airbnb or regularly sells items in online second-hand marketplaces to check whether they meet HMRC’s “badges of trade” and, therefore, need to pay tax on this income. It is now estimated that the average Airbnb host makes at least £3,000 per year, with 50,000 people currently hosting in the UK.
If these individuals meet HMRC’s “badges of trade”, they will need to register for Self Assessment as soon as possible, and then file their tax return before the January 31st 2018 deadline for submissions – or else receive a £100 fine from HMRC, and risk further penalties for not paying the tax they owe.
During the last Self Assessment season, 840,000 people (14% of taxpayers) failed to submit their tax return before the January 31st 2017 deadline; leading to automatic £100 fines from HMRC.
Ed Molyneux, CEO and co-founder of FreeAgent, said: “With the rise of the sharing economy and the increase in the number people making regular sales on sites like eBay and Gumtree – as well as renting out property on Airbnb – many people are making money outwith their usual work. Therefore, HMRC looks at a range of factors to determine whether a person is ‘trading’ or not and whether they need to pay tax on that income.”
“Many people in the UK may be currently unaware that they actually have to file a Self Assessment tax return, so it’s vital that everyone checks whether the money they make is taxable income or not.”
“By reviewing any ‘on the side’ cash you accumulate against HMRC’s badges of trade, you’ll be able to tell whether you need to register for Self Assessment and file a tax return – and avoid any nasty surprises from the taxman in the future.”
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