The minister responsible for HMRC, James Murray, has announced that those with side-hustles can earn up to £3,000 before they have to file a tax return, although tax will still be due on earnings over £1,000. A new service will also be launched on 31 March, for agents to escalate and resolve self-assessment and PAYE queries.
Mr Murray made a series of announcements falling under HMRC's 'Plan for Change' at an event hosted by the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales, marking the 20th anniversary of HMRC.
Trading income reporting threshold
Mr Murray told guests that reforming the Income Tax Self Assessment (ITSA) reporting threshold for trading income would mean 300,000 people, including those with Side-hustles like Online selling or dog walking, would no longer need to file a Self Assessment tax return.
Mr Murray said an estimated 90,000 taxpayers would have no tax to pay and no reason to report their trading income. The benefit, he said, would include, "Freeing up time for taxpayers helping to create the conditions for economic growth."
Although increasing the gross income reporting threshold by the end of this parliament from £1,000 to £3,000 will take individuals out of ITSA, those that have Income Tax to pay will still need to report their income through a new online service.
Personal tax query resolution service for agents
Mr Murray announced that HMRC will introduce a new service for agents on 31 March 2025, to help escalate and resolve PAYE and self-assessment queries, focusing on issues that have not been resolved by the Agent Dedicated Line or Agent Webchat.
Before agents can use the tool, they must have:
- Checked the 'Where’s my Reply' tool, with at least 20 working days having passed from the reply date given by the tool.
- Tried at least twice to resolve the query by contacting the Agent Dedicated Line or Agent Webchat.
Agents will be able to contact the service by emailing HMRC's dedicated mailbox, which can be found on GOV.UK from 31 March 2025. In response, HMRC will:
- Make contact within 48 hours to acknowledge the query.
- Provide an update every five working days by telephone.
- Aim to resolve the query within 20 working days, or make an action plan if this is not possible.
Other announcements
Mr Murray also announced:
- A digital pilot with the United States Customs office to test ways to speed up trade processes for U.S. and UK businesses.
- New measures to tackle phoenixism, including HMRC and the Insolvency Service working together to increase the use of securities.
- A new whistleblowing reward scheme offering 'significant' compensation (based on a proportion of the tax take) to those who report serious tax fraud.
- Taxpayers calling HMRC will be able to use their voice as their password. Voice biometrics are currently being trialled by HMRC.
- Consultation would begin in Spring 2025 on a range of measures, including widening the use of advance clearances for Research and Development Tax Relief.
The measures are part of HMRC's 'Plan for Change' through securing tax revenue and creating the conditions for growth.
Useful guides on this topic
Online Sellers & Tax
What are the tax implications of being an online seller? When does a hobby become a business? What is a side-hustle? What expenses can online sellers claim for tax purposes? Are there special rules for taxing income? What are the VAT rules for online sellers?
Influencers & Tax
What expenses can online influencers claim for tax purposes? How is their income taxed? Are there special tax or accounting rules for influencers? What are the VAT rules for online influencers?
Badges of Trade: Are you trading or not?
Are you trading, running a business, or just buying and selling investments? Is your 'side-hustle' taxable? The 'Badges of Trade' are a set of indicators built up over time by the courts to decide when an activity is a trading or investment activity.
External links
HMT Press Release: Boost for side-hustlers as 300,000 people to be taken out of tax returns, government announces
Speech: Exchequer Secretary to the Treasury: 20 years of HMRC - reflections and looking ahead
