If you’ve been selling goods or services through platforms like eBay, Etsy, Vinted, Depop, Amazon, or even offering side hustles via Fiverr or social media, you could be on HMRC’s radar.

Lately, we’ve seen a growing number of HMRC “nudge letters” being sent to individuals who earn extra income from online marketplaces and side gigs.

What is a Nudge Letter?

A nudge letter is HMRC’s way of encouraging you to review your tax affairs without launching a formal investigation—yet. These letters are part of a strategy known as “nudging compliance”, where HMRC prompts taxpayers who they believe may have under-reported income to voluntarily correct their returns.

It’s not a random mailing. If you’ve received one, HMRC believes you may have undeclared income—often from online sales, services, or freelance work. They usually already have the data on you.

Why Have I Received a Nudge Letter?

There are several reasons HMRC might send you a nudge letter:

• Data from online platforms: HMRC now receives information from online marketplaces under international and domestic data-sharing rules. If you’ve been selling regularly, your details may have been passed to them.
• Unusual bank transactions: Large or regular incoming payments could flag your account during HMRC’s automated checks.
• Inconsistencies in tax returns: If you’ve previously declared self-employment income and then stopped without explanation, or if your lifestyle doesn’t match your reported income, it might trigger a letter.

It’s important to note: selling personal items occasionally (e.g., clearing out your wardrobe) generally doesn’t count as taxable income. But repeated or organised selling, making or buying items to sell, or earning money through services likely does.

How Should I Respond?

Don’t panic—but don’t ignore it either. Here’s what you should do:

1. Review your records – Look at your sales, income, and activity across platforms. Were you trading or just occasionally selling? Did you exceed the trading allowance (£1,000)?
2. Speak to a tax professional – This is where we come in. We’ll help you assess whether tax is owed, what years are in question, and how to respond.
3. Take action quickly – You may be asked to complete a Digital Disclosure Service (DDS) submission. How you handle this can significantly affect the outcome, including potential penalties.

We Can Help

At Premier Tax Solutions we are tax specialists based in Stoke-on-Trent who handle HMRC nudge letters, tax disclosures, and full-blown investigations. We can guide you through every step:

• Review your income and trading status
• Determine what needs to be disclosed
• Manage all HMRC correspondence on your behalf
• Negotiate penalties and protect your position

Final Thoughts

HMRC’s approach is becoming increasingly digital and data-driven. If you have a side hustle, trade on marketplaces, or earn freelance income, now is the time to get your tax affairs in order.

If you’ve received a nudge letter, or just want peace of mind that you’re compliant, get in touch today. We’re here to help you stay one step ahead of HMRC.

Click here to book your free 15 minute discovery call.