Short answer: yes, increasingly so.
And before that feels alarming, here’s the fuller picture.
Online platforms now share data with HMRC
Since January 2024, HMRC has been operating under new international rules — agreed as part of a global effort to ensure people pay the right amount of tax on income earned through digital platforms.
Under these rules, platforms that facilitate the sale of goods and services are required to collect information about sellers and report it to HMRC. This includes payment processors and marketplaces. (HMRC — Selling online and paying taxes information sheet)
What kinds of platforms are covered? The guidance points to marketplaces where you sell goods, platforms where you provide services, and digital tools that process those payments.
Does this mean I’ll automatically get a tax bill?
No. HMRC receiving data about your online activity does not mean you owe tax. Whether you owe tax depends on what you’re doing and how much you’re earning.
If you’re simply selling personal belongings — old clothes, furniture, items you no longer need — you are unlikely to owe income tax on those sales. (HMRC — Check if you need to tell HMRC about your income from online platforms)
If you’re trading — buying or making goods with the intention of selling them for a profit — and your total income from that activity exceeds £1,000 in a tax year, you do need to tell HMRC.
Why does this matter?
It matters because some people presume that cash payments or online payments through third-party processors sit outside HMRC’s view. That was never entirely accurate, and it is less accurate now than it has ever been.
The practical implication is straightforward: if you’re earning money through a side hustle, the right approach is to understand what you owe and declare it through the proper channels. HMRC’s guidance is written to help people do exactly that — not to catch people out.
Where to start
HMRC has a free checking tool that walks you through your specific situation and tells you whether you need to declare your income. It’s anonymous. Nothing you enter is stored. (HMRC — Check if you need to tell HMRC about your income from online platforms)
If the tool tells you that you do need to declare income, the next step is registering for Self Assessment. The process is straightforward, and HMRC’s guidance walks you through it step by step. (HMRC — Check how to register for Self Assessment)
The short version: HMRC has more visibility than it once did. The good news is that for the majority of people selling occasional items or earning small amounts from a side hustle, the rules are on your side. Understanding them is the first step.
Use our free UK side hustle tax calculator to find out exactly what you’d owe — and whether you need to register for Self Assessment.