Outdated HMRC Tax for Britons Bagging an Extra £840 Every Month from Side Hustles

04 October, 2021 by Denzil Otieno 4 mins read Category:  Credit Cards Money Personal Finance

According to research conducted by Credit Karma UK, approximately 24% of people in the UK currently have two or more jobs or other hustles to add to their income.

The need to get extra work outside the regular income is being catalysed by the adverse effects of the COVID 19 pandemic.

According to a survey conducted, 61% of British adults admitted that the success of their side hustles was the cornerstone of their financial stability.

But that’s not all—approximately 12% of Britons have secured extra work before the pandemic, and another 12% finding side hustle in the past 18 months.

While there’s an increase in the number of side hustles coming to light every day, roughly 10% of Britons have decided to invest and purchase bitcoins as of March 2020.

Some side hustlers have earned more by investing money in thrift stores (6% ) and joining focus groups(5%)—with more men in the front line than women, with a difference of approximately 7%.

The Average Men Earnings for Second or Third Jobs 

The difference in the average earnings between men and women is substantially high. Men earn around £840 from their extra jobs compared to women who make £670 per month, creating a margin of about £2000 annually.

According to the survey carried out by Credit Karma:

  • Twenty percent of respondents consider a side hustle to help clear their debt.
  • Thirty-two percent of respondents leveraged the side hustle income for savings 
  • Averagely a side hustler was taking at least three jobs at a go.

Nearly 49% of the respondents were affected by the emergency tax levied on entrepreneurs with several enterprises—a setback when it comes to supplementing their income—with about 59% of the entrepreneurs deeming the emergency tax as unfair.

The volatility of side hustles employment leads to failure of accurate declaration of earning reports by Britons to HMRC; thus, liberal taxpayers are being charged heavily through the emergency tax.

HMRC issues an emergency tax when you don’t hand in your income details punctually after a change in circumstance—for example, change in job, transfer from self-employment to traditional full-time employment and being on a state pension.

Therefore, side hustlers are advised to update their details in time so that HMRC doesn’t levy on earnings from extra jobs that exceed £ 1,000.

Ziad El Baba’s Explanation of the Rise of Side Hustles 

Credit Karma UK’s General Manager, Ziad El Baba, spoke on the rise in prominence of side hustles in the previous years. The expert further said that the emergency tax affects the ability of upcoming entrepreneurs to prosper.

According to Mr Baba, the nation has exhibited ingenuity and flexibility even with the crisis, and this has revealed the nation’s entrepreneurial potential.

He further added that emergency tax is becoming a nonissue as people are determined to get extra jobs to supplement their earnings to obtain financial stability.

People are, therefore, encouraged to look into the tax implications before taking on extra jobs.

You may also like
Four Top Tips From Personal Finance Experts On How To Pay Off Credit Card Debt
Credit card debts are one of the most frequent financial issues, and they can quickly...
6 mins read
Credit Cards
Debt
Money
Personal Finance
The Over 50s Will Now Work Even After Retirement Age
The economic disruptions caused by the COVID-19 pandemic has forced millions of Britons to remain...
4 mins read
Debt
Money
Personal Finance