HMRC Crackdown on Digital 'Gig Economy'

1 day, 3 hours ago by Oliver Atkinson

Influencers, online sellers, content creators and other workers of the online gig economy will receive letters from HMRC warning them to check that they have paid enough tax.

HMRC are targeting digital nomads of Britain’s increasingly large gig economy who may owe tax on undeclared income. The letter will say that “ We have information that shows you’ve earned money (income) from creating content on digital platforms” and that “We also have information that shows that you have not told us about some or all of this income. This means you may owe tax”.

They will be asked to complete a ‘certificate of tax position’. It is advised that if you receive one of these letters you seek professional advice from an accountant due to the risk of submitting false information.

The personal allowance (tax free income threshold) for individuals for the 2022 tax year, that was due on 31.01.2023, is £12,570.00 and any income in excess of this is subject to income tax starting at 20%. This means that if you earn £15,000.00 during the period 6/4/21 to 5/4/22 then £2,430.00 of that is subject to income tax.

Self employed workers are required to complete an annual self-assessment tax return to declare any income to HMRC. It is important to properly declare any income to HMRC. Failure to do so could result in prosecution for tax evasion. According to StandOut CV it is estimated that 1 in 6 UK adults work a gig job at least once a week and contribute £20bn to the UK economy. The percentage of gig economy workers has risen from 2.3 million in 2016 to 7.25 million in 2022.

Additionally, it is estimated that almost half of gig economy workers also have a full time job but you must still complete an annual self-assessment tax return and declare any additional income even if you are employed and already pay tax through PAYE (Pay As You Earn).

With such a large and growing area of economic activity HMRC will want to ensure that workers are paying their taxes.

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