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UK’s gig economy faces tighter tax scrutiny from 2024

UK's gig economy faces tighter tax scrutiny from 2024

 

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The UK’s HM Revenue and Customs (HMRC) is intensifying its efforts to regulate the taxation of gig economy workers. Starting from January 1, 2024, digital platforms such as Airbnb, Uber (NYSE:UBER), Deliveroo (OTC:DROOF), Upwork (NASDAQ:UPWK), Etsy (NASDAQ:ETSY), and Fiverr are required to record and report user earnings, a significant part of a broader initiative to detect and tackle tax evasion.

This change is set to impact individuals who earn more than £1,000 (GBP1 = USD1.2255) alongside their regular job or over £2,500 from property rentals or other untaxed income. These earners will be obligated to register for self-assessment tax and report their income. Registration can be done by calling a dedicated phone line or via the Gov.uk website questionnaire.

The new ‘Model Reporting Rules for Digital Platforms’ will play a crucial role in ensuring tax compliance. By comparing platform-reported income with individual tax returns, HMRC aims to establish grounds for potential investigations. The organization has invested £36.69 million ($50.15 million) in this initiative and hired a dedicated enforcement team of 24 staff members.

Seb Maley, CEO of Qdos, emphasized the importance of accurate reporting to avoid discrepancies that could trigger a tax investigation. He also highlighted the implications for the UK’s 7.25 million gig workers who surpass the Minimum Trading Allowance of £1,000 ($1,366) a year.

Additionally, those needing to prove self-employment for Tax-Free Childcare or wishing to make voluntary Class 2 National Insurance payments will also need to register. A P800 form from HMRC indicates a need to pay additional tax.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

Source: Investing.com

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