As it was to be expected the news sparked vast discourse online, with many an X (formerly Twitter) user voicing very valid concerns about whether these are really the people we need to be focusing on and not, say, billionaires who avoid tax. But to what extent will these rules affect normal people selling the occasional outfit or old piece of furniture?

What is the “side hustle tax”?

From 1 January 2024 digital second income apps, which include Depop, eBay, Vinted, Etsy, Airbnb, Deliveroo and Uber, will have to collect and share data with HMRC.

The government was already able to access data from these platforms upon request, but now that it has joined the Organisation for Economic Co-operation and Development (OECD) companies will be required to report it.

This data will help the government determine whether you’re paying the right amount of tax. But do the Depop girlies need to worry? Not necessarily. This won’t affect you unless you’re making a significant amount of money every year. Still, there are things you need to know to make sure you don’t get done for tax avoidance.

Anyone who earns under £1,000 from a side hustle does not need to declare it or pay tax on it. So the odds are if you’re selling the odd pair of jeans here and there, this won’t affect you. What the government is trying to do is ensure that those who actively trade as shops on Vinted aren’t avoiding tax.

That’s why these platforms will only share data from really active sellers with HMRC – those making over €2,000 (around £1,700) a year or over 30 sales. They’ll first report the data at the end of January 2025.

Regardless, if you make less than £1,700 but over £1,000, you should file your self assessment tax return anyway. It’s not a “double tax”, you’ll still get taxed the standard amount depending on your income.