Two countries watching the same side hustle

Form 1099-K is an information return reporting payments you received for goods or services, issued by payment card companies, payment apps and online marketplaces. The IRS guidance describes it as something to use alongside your own records rather than as a statement of taxable income.

It reports gross payments. Fees, refunds and costs never come off before the figure is struck.

The form's own page carries the current instructions. Read them for the year you are filing rather than from memory.

For payment apps and online marketplaces, the trigger is payments for goods or services above $20,000 in more than 200 transactions. Both limbs must apply before a form is due.

For direct card payments the position is quite different. A card processor issues the form however few payments there were and however small they are.

A Form 1099-K can also arrive below the threshold, because nothing stops a payer issuing one voluntarily.

So the threshold tells you when a form is required, not when income is taxable. Those are separate questions with separate answers.

This is the sentence that matters most. Income goes on the return whether or not a form arrives, and the IRS says so on the same page that explains the thresholds.

Somebody below every Form 1099-K threshold still reports what they earned. The absence of paperwork is an absence of paperwork.

That is why a year of small sales can be a real filing issue even though nothing landed in the post.

So start from the activity rather than from the forms. The forms are evidence, not the rule.

The same holds in reverse. A form arriving does not make something taxable that was not.

A quite separate regime from Form 1099-K, aimed at the platform rather than the payment. The GOV.UK guidance sets out what operators collect and send.

For an individual seller that is the full name, home address, date of birth and tax identification number, which for a UK resident means the National Insurance number.

Operators report the total earned on the platform for the year after fees, commission and taxes, broken down by quarter. For property renters, the address of each property goes in too.

So the two systems do not even measure the same thing. One reports gross payments and the other reports income net of the platform's cut.

Operators collect the information each year and send it to HMRC by the following January. A 2024 year was reported by 31 January 2025.

Where the seller lives in another country that follows the same rules, HMRC passes the details to that country's tax authority.

There is a de minimis, and it is small. A seller escapes reporting only by making fewer than 30 sales of goods in the year and taking less than 2,000 euros for them.

So almost anybody doing this seriously is reported. The exemption is for the person clearing out a wardrobe.

The two limbs of the de minimis both have to hold. Thirty sales of a few pounds each still clears the first one and leaves you reported.

No, and HMRC says so directly. A report to a tax authority settles nothing about taxability, and the guidance states plainly that a platform passing on your details does not automatically mean you owe tax.

What matters is whether you are trading or making a capital gain. Selling personal household items rarely attracts tax.

Buying or making goods in order to sell them at a profit is a different matter and looks like trading.

So the analysis is the same one it always was. The reporting changed; the test did not.

Take an American in Leeds who sells handmade ceramics through a marketplace and takes card payments at weekend markets. The marketplace sales come to $9,000 across 120 transactions.

No marketplace form falls due, because neither limb of the threshold applies. The card processor, however, issues a Form 1099-K covering every market payment regardless of size.

None of that touches her British position. She is trading, so the profit belongs on a Self Assessment return whatever forms exist.

Her American return reports the same trade, with credit for the British tax. The forms are evidence of part of it and not the measure of any of it.

Money from friends and family, whether a gift or repayment for a personal expense, never belongs on the form. Splitting a meal, a car ride or a household bill is not income.

Payment apps generally let you mark a payment as personal rather than as goods or services. Using that setting is worth the two seconds.

Where a personal payment does end up on a form, the return has to deal with it rather than ignore it.

So separate the accounts if the volume is meaningful. A business account and a personal one solve this permanently.

So keep the habit even when the amounts are trivial. A year of unmarked personal transfers adds up to a number somebody then has to explain.

A Form 1099-K reports what came in, not what you kept. Platform fees, shipping costs, refunds and chargebacks all sit outside the number.

Schedule C is where the reconciliation happens for most sole traders, and it is the form that turns a gross figure into a profit.

So the figure on the form will routinely exceed the income anybody would recognize. The return reconciles the two.

Keeping the fee statements matters as much as keeping the sales records, because the deductions depend on them.

So reconcile at the year end rather than the following spring. Our note on Schedule C as a UK sole trader covers the American side of the computation.

A Form 1099-K reports in dollars and a British platform reports in sterling, which means two sets of figures for one business.

They will not reconcile to each other, and nobody intends them to. The underlying trade is the same and the measurement conventions differ.

Keeping the original currency alongside the converted figure is what makes both returns possible from one set of books.

So decide the conversion method once. Our note on which exchange rate to use covers the choices.

So record the rate beside each figure, not just the converted total. A rate you cannot evidence is a rate somebody can argue with.

Separately from platform reporting, the two tax authorities exchange information about accounts and income under long-standing arrangements.

Platform reporting is recent and account reporting is not. One grew out of an OECD model for the gig economy; the other has been running between tax authorities for years.

That is a different pipe from the one platforms use, and it carries different data. Confusing the two leads people to assume either more or less visibility than exists.

Our note on exchange of information covers what actually moves between them.

So assume the activity is visible and file on that basis. It is the only assumption that is safe in both directions.

Both countries draw a line between selling things and running a business, and both draw it on the facts rather than on the turnover.

Buying stock to resell looks like trade. Clearing a loft does not, even if the total is large.

Repetition, organization and a profit motive all push the analysis one way. A single windfall pushes it the other.

So describe the activity honestly before classifying it. The reporting arrives either way and the treatment does not.

Get a second opinion where the answer is genuinely close. The classification drives the rest of the return and is expensive to revisit two years later.

Platform statements, processor reports, fee breakdowns and refund records. All four are needed and only the first two arrive automatically.

Download them as they appear rather than at the year end. Platforms close dormant accounts and archives thin out.

Keep the sterling and dollar figures side by side from the start. Reconstructing a conversion afterwards is the slowest part of the job.

So set the filing system up once in January. It costs an hour and it saves the whole spring.

The first is waiting for a Form 1099-K before reporting anything. Income is reportable without one and always was.

The second is reporting the gross figure as profit. A Form 1099-K is a starting point and the costs come off after it.

The third is assuming the card processor has a threshold. It does not, so a small amount of card trade still generates paperwork.

A fourth is letting personal transfers run through a business account, which puts gifts on a form that was never meant to carry them.

We start from the platform statements and each Form 1099-K, then reconcile both to the actual trade rather than to each other.

Then we settle whether the activity is trading at all, because for some people it genuinely is not and that changes everything.

Our US federal returns work covers the American computation and the records behind it, and you can get in touch before the year closes.

So the work belongs in the autumn, when the statements are still downloadable and the decisions are still open.