For many performers, there’s always a side hustle that gets you through the gaps between projects or just tops an income up. It’s always been the way – it might have been working behind a bar or in a restaurant in times past (with your CV or script kept handy in case Scorsese pops in).
That kind of work is a little old school in the gig economy where many supplement their income by working on platforms such as Uber, Etsy, Upwork or Fiverr, or by selling old clothes and items on Vinted or Depop.
And now the rumour has gone round that there is a ‘Vinted tax’, generating ill-feeling that the stuff you bought (with your taxed income) and that you already paid VAT on will now be taxed again as HMRC look to make your life as miserable as possible.
In truth, very little has changed. What’s different is that, from the start of this year, new data-sharing rules will come in that will force these digital platforms to share their users’ information, including their income, with HMRC.
So, you will need to record and declare that income when you do your self-assessment, and you should be keeping a record of the costs and investments you made to do that work – whether it’s the tools for your jewellery making on Etsy or the software for your graphic design business on Fiverr. It is, after all, a business so tracking your costs is as important as counting your revenue.
The actual rules on tax haven’t changed, just the transparency. You are still allowed £1000 of ‘trading income’ with incurring income tax or national insurance, and for most of those selling old clothes this will not be an issue. For those who generate a genuine second income and have been hoping to keep it quiet, there may be some issues.
As ever, it is messy – but we can guide you through it, so get in touch.