Whether you’re selling online, renting out a spare room, or walking dogs in your spare time, it’s important to know when HMRC expects you to report income.

Key points:

• If your additional income is under £1,000 a year, you don’t need to report it.
• If your additional income is more than £1,000, you must declare it. Currently, this means submitting a full self-assessment tax return.

A simpler process is on the way. The government plans to introduce a new online system to allow people with trading income between £1,000 and £3,000 to report their income and pay any tax due without needing to complete a full tax return.

If you have no tax to pay, you won’t need to report the income at all. Those earning over £3,000 will continue to use the self-assessment system.