Part-time eBay traders and other small and medium enterprises may need to register with HM Revenue & Customs for self-assessment tax returns, or face new penalties that could double the tax due, the department warns.
Particularly those whose small businesses are approaching the £70,000 gross sales threshold for VAT need to tell HMRC of the fact.
Others who need to tell HMRC of the change in their circumstances include those who are renting out a property or receiving an income outside their regular jobs, or if they have sold an asset at a profit, HMRC said.
It may also include job seekers who earn income while looking for a new job, in which case they need to register as self-employed, an HMRC spokesman said.
The spokesman said timing is important. Under regulations that took effect from 1 April, taxpayers could face a penalty of up to 100% of the tax due on the undeclared income.
"The amount of the penalty will also depend on how much help you give HMRC. If you provide access to your records and help HMRC calculate what tax is due, the amount will be reduced," the HMRC said.
But if you tell HMRC within a year of the change in your income, HMRC may cut the penalty to zero.
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