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UK Gig Economy Workers Warned About Looming Tax Deadline

by Jason Gorringe, Tax-news.com, London

20 September 2017


Those UK taxpayers performing irregular work or receiving income from the nascent "gig economy" should consider whether they need to register for self-assessment tax with the UK tax authority, the Low Incomes Tax Reform Group (LITRG) has said.

The charity is concerned that many people working in the "gig economy" may not realize that they must register by October 5 to declare a new source of income.

LITRG is concerned that because of the irregular and often "on demand" nature of "gig economy" income it may not even occur to people that their activity is taxable. They may also be unaware that where the level of income means that there will be no tax or National Insurance due, HMRC should still be notified as it may still be necessary to complete a tax return.

Failing to notify a new source of income and to complete and submit a tax return when required to do so can lead to financial penalties.

LITRG Chair Anne Fairpo said: "Behind the innovative technology and new language surrounding the 'gig economy' lies an old-fashioned taxable source of income. If a person's activity is regular, organized, and is done with a view to generating a profit, then this will put them within the realms of self-employment and the UK's complex self-assessment tax return system. There is a real risk of penalties for failure to notify HMRC, which are based on the tax that could potentially be lost as a result of the failure to notify on time."

LITRG is seeking to remind people that even income from one-off jobs or very casual work is taxable. This includes work that does not fall into a category of employment or self-employment, which may be taxable as "miscellaneous" income. In this case the worker still needs to tell HMRC, it is just that HMRC may be able to collect any tax owed on it through adjusting their PAYE tax code instead (if they have one), LITRG said.

TAGS: compliance | tax | business | tax compliance | law | United Kingdom | self-employment | HM Revenue and Customs (HMRC) | penalties | HM Revenue and Customs (HMRC) | trade

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