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THE ‘ONE TO MANY’ LETTER CAMPAIGN WILL ‘NUDGE’ INDIVIDUALS SUSPECTED OF OPERATING IN THE HIDDEN ECONOMY. 10:15, 27 Feb 2025 HMRC is stepping up a crackdown on people who have side hustles if
they don’t report their income to the Labour Party government's tax arm. The ‘One to Many’ letter campaign will ‘nudge’ individuals suspected of operating in the hidden economy. The
letter states: “We have information that shows you’ve earned income from online marketplace sales up to the tax year ending 5 April 2023. You need to tell us about this income. This is
because you may owe tax.” Recipients have 30 days from the date of the letter to either declare their income or contact HMRC. “People who receive this letter may be tempted to file it away
but they absolutely should not ignore it,” Dawn Register, a tax dispute resolution partner at BDO said. READ MORE WARNING ISSUED FOR ANYONE WITH PETROL LAWNMOWER IN GARDEN SHED OR GARAGE A
One to Many approach is where HMRC sends one standard message to many customers. The aim is to influence customers' behaviour, so they are more likely to comply with their tax
obligations. A One to Many approach is not a compliance check. This guidance sets out how to carry out a One to Many approach in HMRC. Article continues below “Unpaid tax may be subject to
late payment interest – currently at seven per cent and set to rise by a further 1.5 percentage points in April – plus penalties depending on the nature of the reasons for non-compliance, so
it often pays to come clean at an early stage.” “This campaign should serve as a warning to those who are earning income from online platforms and marketplaces that they will need to ensure
they comply with their tax obligations,” Register said. “HMRC now has automatic access to much more data on digital platform users and their transactions, leaving few places to hide for
people intent on hiding their earnings.” Those earning additional income alongside their main job, where they're already taxed, can earn up to £1,000 tax-free from side hustles. This
limit applies to total earnings from all side gigs, not each individual source. Article continues below f your extra income exceeds this threshold - say you make £650 from online sales and
£500 from content creator sponsorships - you may need to notify HMRC and pay tax. This can be done using the Gov.uk checker tool and by registering for Self-Assessment before October 5. Due
to the £1,000 threshold, your tax liability is based on your earnings, not the quantity of items sold. For instance, if you sell a single handmade piece of furniture for over £1,000, you
might be liable for tax from this initial sale. Alternatively, if you sell 40 pairs of unwanted shoes but only make £800, you may not be liable. It's always wise to consult with HMRC if
you're uncertain about your tax obligations.