£1k side hustle tax hassle

The new rules kicked in this month and have caused particular concern as people look to raise extra cash on the side to survive the cost-of-living crisis.

- Harvey Jones

HMRC is pioneering a method of collecting information on people who sell goods and services online, small time entrepreneurs, gig workers and those letting out spare rooms. Alan Thomas, chief executive of small business insurer Simply Business, said the measures have a simple aim: "To target people who evade taxes by failing to declare their income to the authorities."

There are penalties for avoiding tax so here's what's happening and how the changes could affect you. What's actually changing? Digital marketplaces such as eBay, Airbnb, Vinted and Uber must tell HMRC how much money users are earning each financial year. The taxman will verify the data against its records to ensure sellers are correctly reporting their income on their tax returns.