HMRC has created a tool to help people running side hustles to work out whether they are liable for income tax on their additional earnings

This is on the back of new disclosure rules for online marketplaces which come into effect in January 2025, requiring the platforms to report all sales by individuals to the tax authority.

The rules will affect content creators and influencers earning income through social media and streaming channels such as YouTube and Twitch.

We would expect a flurry of activity as previously unreported income is now declared in a hurry.

The HMRC tool is a questionnaire which starts by asking whether you received any additional income, whether it was for selling goods or services, renting out land or property, creating online content or any other form of earnings.

If the tool decides that tax is owed, a green banner appears stating: ‘You need to tell HMRC about this income’.

Links are then provided to register for, or complete a self-assessment tax return.

By 31 January the platforms will have to report data to HMRC for the calendar year 2024, meaning this will cover at least part of the 2023-24 tax year. Those needing to file a return for this period will need to do so before 31 January 2025.

Taxpayers who have not correctly reported their earnings for previous years are advised to bring their historic tax affairs up to date in case HMRC comes calling at a later date when interest and penalties could be significant.