Best Accountants in Aberystwyth

Did you branch out during lockdown? Perhaps breeding from your favourite black labradoodle or making speciality cakes and selling them on a Facebook page? Have you considered what the position is with tax however? It can be difficult sometimes to know where a hobby stops and a trade begins. But where there’s any question of additional income, it’s not always appreciated that HMRC may need to be told. This applies to all sorts of fairly informal arrangements, from making sales online to taking on casual jobs like dog walking, gardening or babysitting: even renting out property or part of the home. The questions HMRC will have are: has this person effectively set up a business and does this amount to trading income, or property income? To decide, there are particular signs HMRC look for. These are sometimes called the ‘badges of trade’. They include the intention to make a profit, the number of transactions, and the way sales are carried out. If you are uncertain, find out more by reading the article 'Side hustle. Tax?' on page 4 of our latest newsletter.