The Government has announced plans to increase the threshold above which income from self-employment must be reported via self assessment.
Currently, if you earn over £1,000 from self-employment, or a so-called ‘side hustle’ such as babysitting or dog walking, you need to report this income to HMRC by filing a self assessment tax return, even if you do not owe any tax.
To save time and reduce the administrative burden for some 300,000 taxpayers, the Government intends to increase this threshold to earnings of £3,000 a year by the end of the current Parliament (April 2029 at the latest).
This is only a change to the reporting requirements – you will still need to let HMRC know about and pay any tax due on income between £1,000 and £3,000. This will be done via an alternative online service which the Government says will be simpler than self assessment.
The threshold is based on gross income, before any expenses are deducted. Taxpayers with income above £1,000 per year should continue to report this via self assessment until an implementation date for the change has been announced.
If you are earning between £1,000 and £3,000 per year from a ‘side hustle’ contact us to discuss what this change is likely to mean for you. an take to mitigate potential tax liabilities
