HMRC has launched a fresh summer campaign reminding people with “side hustles” that extra income may need to be reported for tax purposes. The announcement specifically highlights people earning income from wedding services, online selling, content creation, freelancing and similar activities.
The key figure remains the £1,000 trading allowance. If total income from side activities exceeds £1,000 during the tax year, there may be an obligation to register for Self Assessment and declare the income to HMRC.
This is particularly relevant because HMRC now receives increasing amounts of information from digital platforms. Data from marketplaces and gig economy platforms can be matched against tax returns, making it easier for HMRC to identify undeclared income.
Importantly, not everyone selling online has a tax problem. Selling unwanted personal possessions is generally not taxable. However, regularly buying or making goods to sell, or providing services for payment, is likely to be treated as trading.
If you have a side hustle, you should:
- Review any additional income streams
- Check whether total trading income exceeds £1,000
- Register for Self Assessment if required
- Keep proper records from the outset rather than trying to reconstruct them later
Early disclosure is almost always easier and cheaper than dealing with an HMRC enquiry.
Your questions answered
What is the £1,000 trading allowance?
The trading allowance lets individuals earn up to £1,000 of gross income from self-employment, side hustles or casual trading activities each tax year without needing to pay tax on that income. If your total trading income exceeds £1,000, you may need to register for Self Assessment and report the income to HMRC.
Do I need to pay tax if I sell items online?
Not necessarily. Selling unwanted personal belongings, such as second-hand clothes, books or household items, is generally not taxable. However, if you regularly buy, make or source goods to sell for profit, HMRC is likely to view this as a trading activity and the income may need to be declared.
What records should I keep for my side hustle?
You should keep accurate records of all income received and any business-related expenses. This could include invoices, receipts, bank statements and records from online selling or gig economy platforms. Good record-keeping makes it easier to complete tax returns and respond to any questions from HMRC.
