300,000 people to be taken out of tax returns in boost for side-hustlers

There’s some good news from HMRC as tax admin changes to mean up to 300,000 taxpayers won’t be required to file a tax return.

Easier access to tax relief on temporarily imported fine art and antiques often shown in galleries and exhibitions announced, boosting the sector’s international competitiveness. 

UK’s tax minister James Murray announced these alongside a raft of other measures to help HMRC deliver Plan for Change through securing tax revenue and creating the conditions for growth in a speech in March 25.

This includes people trading clothes online, dog-walking or gardening on the side, driving a taxi, or creating content online.

As part of a bold new package to transform HMRC into a quicker, fairer, and more modern body the minister announced plans to increase the Income Tax Self-Assessment (ITSA) reporting threshold for trading income, from £1,000 to £3,000 gross within this parliament.

These changes are being bought in to simplify the tax system. The increase in the ITSA trading income reporting threshold will align with the new reporting thresholds for property and “other taxable” income.

This will help cut waste, avoid unnecessary worry for customers and improve the conditions needed for them to grow.

Murray will also highlight simplifications to the customs regime to reduce burdens for traders. These include improvements to the Temporary Admission procedure, which relieves import duties for eligible goods that are imported temporarily. For example, the usual time limit for fine art and antiques will increase from 2 to 4 years.

Plan for Change

This will help deliver the Plan for Change by freeing up time for taxpayers helping to create the conditions for economic growth.

This will benefit around 300,000 taxpayers. An estimated 90,000 of them will have no tax to pay and no reason to report their trading income to HMRC in the future at all.

Others will be able to pay any tax they owe through a new simple online service. The changes reflect the government’s commitment to driving forward efficiency reform, a key component of its Plan for Change.

Mr Murray, the minister responsible for HMRC, announced this reform to tax experts hosted by the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales in a speech to mark the 20th anniversary of HMRC.

He will also detail future simplifications to the government’s Temporary Admission customs procedure, to make this relief for temporary imports easier for a range of sectors to use, including art and antiques, often showcased in exhibitions across the UK.

A new digital pilot with the United States to test ways to speed up trade processes for U.S. and UK businesses was also to be announced.

Minister Murray also update on the work HMRC is doing to tackle phoenixism – where company directors go insolvent to avoid tax – as well as announcing a new reward scheme to encourage informants to come forward to HMRC about tax fraud.

Ellen Milner, Director of Public Policy, Chartered Institute of Taxation said:

“We welcome the government’s focus on simplifying the tax system and improving customer service – rightly two key priorities for HMRC as the tax authority heads into its third decade. A more straightforward, easy to navigate tax system could free up business owners and managers to focus on growing their businesses, rather than spending their days overcoming bureaucratic hurdles. We especially welcome the announcement of a new approach to dealing with slow-moving income tax queries from agents. Hopefully, in due course, this can be expanded to unrepresented taxpayers and to other taxes.”

Eve Williams, CEO of eBay UK, commented:

“This will be welcome news for thousands of UK sellers for whom eBay is a side hustle and a means of supplementing their household income during challenging times. By removing the paperwork associated with selling online, hopefully we will help these side hustles grow into fully fledged small businesses.”

If you are confused about these changes or would like any other advice relating your bookkeeping or accounts, please get in touch with us here at The Hollies Bookkeeping in Shropshire on 01743 790086, email info@holliesbookkeeping.co.uk or visit www.holliesbookkeeping.co.uk

For the full story visit Gov.uk

Photo by Junko Nakase on Unsplash

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