The UK's HM Revenue and Customs (HMRC) is intensifying its efforts to regulate the taxation of gig economy workers. Starting from January 1, 2024, digital platforms such as Airbnb (NASDAQ:ABNB), Uber (NYSE:UBER), Deliveroo (OTC:DROOF), Upwork (NASDAQ:UPWK), Etsy (NASDAQ:ETSY), and Fiverr are required to record and report user earnings, a significant part of a broader initiative to detect and tackle tax evasion.
This change is set to impact individuals who earn more than £1,000 (GBP1 = USD1.2255) alongside their regular job or over £2,500 from property rentals or other untaxed income. These earners will be obligated to register for self-assessment tax and report their income. Registration can be done by calling a dedicated phone line or via the Gov.uk website questionnaire.
The new 'Model Reporting Rules for Digital Platforms' will play a crucial role in ensuring tax compliance. By comparing platform-reported income with individual tax returns, HMRC aims to establish grounds for potential investigations. The organization has invested £36.69 million ($50.15 million) in this initiative and hired a dedicated enforcement team of 24 staff members.
Seb Maley, CEO of Qdos, emphasized the importance of accurate reporting to avoid discrepancies that could trigger a tax investigation. He also highlighted the implications for the UK's 7.25 million gig workers who surpass the Minimum Trading Allowance of £1,000 ($1,366) a year.
Additionally, those needing to prove self-employment for Tax-Free Childcare or wishing to make voluntary Class 2 National Insurance payments will also need to register. A P800 form from HMRC indicates a need to pay additional tax.
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