The new year is upon us, and with it, a new regulation that will require digital platforms like eBay, Airbnb, Amazon, Etsy and Vinted to share seller information with  HM Revenue & Customs (HMRC) as part of the newly coined ‘side hustle tax.’

According to HMRC, the move will crack down on users profiting by more than £1,000 per year through online transactions. Now, sellers exceeding this threshold must register as self-employed and file a tax return at the end of the year. 

“These new rules will support our work to help online sellers get their tax right first time. They will also help us detect any deliberate non-compliance, ensuring a level playing field for all taxpayers,” said an HMRC spokesperson. 

While the HMRC was previously able to request this information from online firms, the onus of reporting now falls on the digital firms. Shared information will include  tax ID, bank account details, transaction amounts, and the number of transactions for sellers with substantial trading activity. 

Failure to comply could result in fines and other penalties, and this process is scheduled to commence by the end of January next year. 

This move comes in the wake of the UK signing up to a global agreement by the Organisation for Economic Cooperation and Development (OECD) which allows tax officials to share information with authorities in other countries. 

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“The rule not only provides a more consistent approach for OECD member countries, but with the UK implementation from January 2024, it will also enable HMRC to quickly and efficiently exchange information with other tax authorities to access data from platforms based outside the UK,” said Susan Roe, Institute of Export and International Trade international trade specialist.

Speaking with the BBC, Adam Jay, chief executive of the second hand marketplace platform Vinted said he did not believe the new rules would affect many of his site’s sellers.

According to him, “quite a small” percentage of Vintage users would trigger the threshold to report to the HMRC. Nonetheless, Jay said they are already reaching out to sellers to explain what the new requirements are and why they exist.