Tax & admin Fred Heritage · 30 January 2017
Sharing economy users face fines for self-assessment tax failure
Anyone who rents property on sites like Airbnb, or regularly sells items online via marketplaces like eBay or Gumtree, should check whether they meet HMRC’s badges of trade? specifications to avoid fines, ahead of the 2017 self-assessment tax deadline. Set for midnight on 31 January, the deadline could bypass micro business owners who regularly use online marketplaces to supplement their income, and who don’t realise they need to be paying tax, accounting firm FreeAgent has warned. HMRC look at a range of factors to determine whether an individual is trading? or not, and the rise of the UK sharing economy could mean many people arent clear whether their income is taxable. If money earned on the side? is taxable, individuals will need to register for self-assessment and file their tax return before midnight on 31 January 2017, or else receive a 100 fine and risk further penalties. Failing to register for self-assessment could result in huge costs to taxpayers. Last year, 870, 000 people across the country failed to submit their tax return before 31 January, and were immediately slapped with an automatic 100 fine. with the increase in the number of people making regular sales on sites like eBay and Gumtree as well as renting out property onairbnb many people are making moneyoutsidetheir usual work, explained FreeAgent CEO, Ed Molyneux. by reviewing any on the side? cash you accumulate against HMRC’s badges of trade, youll 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.
ABOUT THE EXPERTFred Heritage
Fred Heritage was previously deputy editor at Business Advice. He has a BA in politics and international relations from the University of Kent and an MA in international conflict from Kings College London.