Wingate Accountants Ltd

16/04/2025

https://www.wingateaccountants.co.uk/april-2025-ir35-update-a-game-changer-for-contractors/

🗓️ IR35 April 2025 Update: Contractors Back in Control From 6th April 2025, changes to IR35 legislation will put power back into the hands of self-employed contractors and freelancers. One major change is that 13,500 medium-sized businesses will now be reclassified as small businesses, which re...

14/04/2025

Side Hustles Are Now Taxable

https://www.wingateaccountants.co.uk/side-hustles-are-now-taxable-hmrcs-2025-crackdown-explained/

10/04/2025

🔍 Selling Online in 2024: What’s Actually Changed with HMRC & Digital Platforms?
Earlier this year, you might have seen headlines or social media posts claiming that “HMRC is introducing a new tax on Vinted, eBay, and Airbnb users.” Let’s clear this up once and for all:

❌ There is NO new tax on selling your second-hand clothes, kids’ toys, or unwanted Christmas presents online.
What has changed is how online platforms report certain sellers’ data to HMRC.

🧾 What Changed from January 2024?
From 1 January 2024, platforms like eBay, Vinted, Etsy, Depop, Airbnb, Uber, and others are now required to share sales and income data with HMRC under new international transparency rules. These rules come from the OECD and are being implemented across many countries — not just the UK.

🔁 Who gets reported?
Platform operators must report to HMRC if a seller:

Earns €2,000 or more in a calendar year (roughly £1,700), OR

Makes 30 or more sales in a calendar year

If you hit either threshold, your details will be shared with HMRC by 31 January 2025.

⚠️ Important: Just because your platform reported your data does not mean you automatically owe tax or need to complete a Self Assessment return — but HMRC will now know about your income.

✅ Do You Need to Pay Tax?
It depends on what you're selling, how often, and why.

1. Selling Personal Possessions
If you're selling your own second-hand items (things you bought for personal use), you generally do not need to pay tax. Examples:

Selling your old clothes on Vinted

Getting rid of toys, furniture, or books your children have outgrown

Offloading last year's mobile phone

💡 Even if you sell 100+ items, if they were personal belongings, you’re likely not trading — so no tax due.

⚠️ However, if a single item (or a set of items) sells for over £6,000, Capital Gains Tax may apply.
Examples of taxable “sets”:

Matching vases or statuettes

A rare book collection

Antique chess pieces

2. Are You Trading? (aka Running a Side Hustle)
You are probably considered trading (and need to report your income) if you:

Buy items to resell (e.g., flipping car boot finds or stock from wholesalers)

Make products to sell for a profit (e.g., handmade crafts or upcycled furniture)

Sell with the intention of making money, even if it's part-time

You can earn up to £1,000 tax-free per year via the Trading Allowance. But if your income from selling goods or services exceeds this, you may need to:

Register for Self Assessment

Declare your income and pay any tax due

3. Providing Services Online?
If you offer any service through a digital platform, like:

Food delivery (Uber Eats, Deliveroo)

Taxi driving (Uber, Bolt)

Dog walking, cleaning, tutoring, or repairs

Holiday lets (Airbnb)

And earn over £1,000/year, you may need to:

Register as self-employed

File a Self Assessment tax return

4. Content Creation and Influencing
If you earn income or receive free products, services, or gifts in exchange for promoting content, HMRC counts this as taxable income.

Examples:

Social media influencers

YouTube creators with ad revenue

Bloggers receiving paid-for product placements

Even non-cash perks (e.g., free holidays or high-value gifts) count and must be valued at fair market price.

5. Renting Out Property or Land
If you rent out:

A room in your house (even short term via Airbnb)

A holiday home

Your driveway or parking space

…this income might be taxable. You may qualify for allowances (like Rent a Room relief or £1,000 property allowance) — but it still must be declared.

✅ Use HMRC’s Tool to Check
HMRC has published a simple checker to help you determine whether you need to report online income:
👉 Check if you need to tell HMRC about online income

You’ll need:

An estimate of your income for the tax year (6 April–5 April)

To know if you share that income with someone else (e.g. jointly owned property)

Info on any other income you receive (employment, self-employment, etc.)

📌 Summary
Scenario Do You Need to Tell HMRC?
Selling your old clothes or furniture for under £6,000 ❌ Usually not
Selling handmade or upcycled items for a profit ✅ Yes, if over £1,000 total income
Renting your spare room through Airbnb ✅ Yes, if total income exceeds allowance
Getting paid/gifted as a content creator ✅ Yes
Selling an item or set for over £6,000 ⚠️ Possibly – Capital Gains Tax may apply
Using Uber, Vinted, Etsy, Depop, eBay, Airbnb, etc. 🟡 May be reported to HMRC, even if no tax due
📣 Final Word
Just because your online platform shares your info with HMRC doesn’t mean you automatically owe tax. But if you’re making regular income online — even from a side hustle — it’s worth understanding your responsibilities.

Need advice on what qualifies as “trading,” or want help registering for Self Assessment or claiming the right allowances?
📩 Let’s chat — 0161 531 4179

10/04/2025

Do You Need to Pay UK Tax on Foreign Income?

A Quick Guide for 2025 and Beyond

If you earn income from overseas – whether it's wages, rental property, investments, or pensions – you may need to pay UK tax on it. But this depends on your UK residence and domicile status, and recent changes coming into effect from 6 April 2025 could significantly impact your obligations.

🌍 What Counts as Foreign Income?
Foreign income is anything earned outside England, Scotland, Wales, and Northern Ireland. This includes the Channel Islands and Isle of Man.

🏡 UK Resident or Not?
Non-residents only pay UK tax on their UK income.

UK residents normally pay UK tax on all income worldwide, unless they qualify for special reliefs.

Use HMRC’s statutory residence test to confirm your status.

📆 Major Changes from 6 April 2025
Previously, UK residents with a foreign domicile could claim the remittance basis, meaning they only paid UK tax on foreign income brought into the UK. From April 2025, these rules are tightening significantly:

Remittance basis reliefs are largely scrapped.

More residents will be taxed on worldwide income regardless of domicile.

💷 Income Thresholds to Know
If foreign income is under £2,000 and stays outside the UK → No need to report (for tax years before 2025).

If it's £2,000+ or brought into the UK → You must report it in a Self Assessment tax return.

🌐 Working Abroad or Split Roles?
There are special rules for people working part-time in the UK and overseas. If you're seconded to the UK, you may still benefit from Overseas Workday Relief – but this has changed from April 2025.

🧾 Claiming Tax Relief
If your income is taxed in both the UK and abroad, you may be able to claim Foreign Tax Credit Relief or use a Double Taxation Agreement. You’ll often need a certificate of residence from HMRC to prove eligibility.

🏠 Capital Gains from Abroad
Generally, CGT is paid in the country where you’re resident. But non-residents must still pay UK CGT on UK residential property sales.

✅ What You Should Do

Check your residence and domicile status

Register for Self Assessment by 5 October if you have foreign income

Seek advice on remittance basis or dual residency cases

Claim tax relief to avoid being taxed twice

📞 0161 531 4179
If you’re unsure how the new 2025 rules affect you, or you work across borders, we can guide you through your Self Assessment, double taxation relief, and foreign income reporting.

Contact us for expert tax advice.

22/03/2025

Failure to notify penalties under Schedule 41 of the Finance Act 2008 apply when a taxpayer fails to inform HMRC about a liability to tax. However, these penalties only apply if the taxpayer was legally required to notify HMRC about the income under Section 7 of the Taxes Management Act 1970 (TMA 1970).

Key Considerations:
1. Obligation to Notify HMRC
• If a taxpayer has income that is not taxed at source (e.g., rental income, dividends, self-employment profits), they may have an obligation to notify HMRC if their total tax liability exceeds the tax already deducted through PAYE.
• If all tax is collected via PAYE (e.g., through a tax code adjustment), there is generally no failure to notify penalty because there is no additional liability to declare.
2. When Failure to Notify Penalties Apply
• If the taxpayer’s total tax liability is not fully covered by PAYE deductions and they do not notify HMRC about this, they may be liable for a failure to notify penalty.
• However, if HMRC is already aware of the income (e.g., from employer payroll data, savings interest reports, or previous communication), then there is no failure to notify.
3. No Tax Return Filing Requirement
• If the taxpayer is not required to file a Self Assessment tax return, then failure to update a tax code would not automatically trigger a failure to notify penalty. Instead, HMRC may issue a simple assessment to collect any unpaid tax.
• If an assessment is issued and not paid, penalties and interest for late payment may apply instead.

Conclusion:

If someone has no requirement to file a tax return, then failing to update their tax code alone does not typically result in a failure to notify penalty. However, if their untaxed income means they owe additional tax, HMRC could still issue an assessment and charge interest and late payment penalties if the tax remains unpaid.

Would you like guidance on how to correct underpaid tax without penalties?