HMRC implements new tax rules which could mean no hiding place for Uber and other PHV drivers

Self-employed workers have been urged to take note as the HM Revenue and Customs (HMRC) reveals plans to implement significant tax rule changes for individuals that work side hustles, like drivers for Uber and other ride-hail operators, in the new year.

The move is part of a wider crackdown on tax evasion within the gig economy.

Starting from 1 January 2024, digital platforms such as Airbnb, Fiverr, Upwork, Uber, Deliveroo, and Etsy have been instructed by HMRC to record and disclose the amounts earned by individuals through their services.

The aim is to make it easier for HMRC to detect any discrepancies between the reported income by these platforms and the actual earnings declared by individuals, thereby strengthening their ability to launch tax investigations.

The new rules are expected to impact those who engage in side hustles, freelancing, and self-employment using these digital platforms. Workers involved in such activities are advised to engage with the changes and ensure compliance in order to avoid any potential penalties.

According to Birmingham Live, the HMRC has allocated £36.69 million for this initiative, which includes the employment of 24 full-time staff dedicated to launching and enforcing these measures. This investment underscores HMRC's determination to tackle tax evasion and ensure fair contributions from individuals involved in the emerging gig economy.

The introduction of these new tax rules reflects a growing trend worldwide, where governments are seeking to regulate and monitor the income generated through digital platforms. The UK is following the footsteps of countries like the United States and Australia to address tax discrepancies and close loopholes that have been exploited by some in the gig economy.

HMRC's proactive approach serves as a reminder for individuals across the UK to review their financial affairs and take necessary steps to ensure compliance with the forthcoming changes.

It is essential for taxpayers with ‘side hustles’ to understand their tax obligations, accurately report their income, and keep detailed records to avoid any potential audit or investigations.

In 2022, HM Revenue and Customs (HMRC) introduced a new tax check that must be completed when people renew their licences to drive taxis, or drive and operate private hire vehicles, in England and Wales.

The check however did not include any calculations. It simply confirms a driver is registered for tax on their licensed taxi or private hire vehicle income.