You have sold clothes on Vinted. You have freelanced at weekends, walked dogs, or delivered food through an app. Then a headline tells you HMRC is cracking down on side hustles, and the numbers in the next article contradict it.
Three figures keep getting mixed up: £1,000, about £1,700, and £3,000. Each one does a different job in the side hustle tax rules. Only one of them decides whether you must file a tax return today.
£1,000: the rule that applies now
The trading allowance gives you £1,000 of tax-free trading income each tax year. It is measured on gross income, the money that comes in before you take off any costs.
It is one allowance across all your side income, not one per activity. Sell £600 of crafts on Etsy and earn £500 from dog walking, and your total is £1,100. You are over the line.
If your gross trading income is £1,000 or less, you owe no tax on it and you do not need to register or report it. If it goes over £1,000, three things follow:
- Register for Self Assessment by 5 October after the tax year ends.
- File your return by the following 31 January.
- Deduct either the £1,000 allowance or your actual expenses, whichever is worth more. You cannot claim both.
The allowance covers trading income only. It does not touch your salary from a job. A separate £1,000 property allowance exists for rental income.
About £1,700 and 30 sales: the reporting line, not a tax line
Since 1 January 2024, digital platforms have had to collect details about their sellers and report them to HMRC each year. That includes marketplaces like eBay, Vinted and Etsy, and apps for delivery, rides and short stays.
For selling goods, there is a casual seller carve-out. A platform does not report you if both of these are true in the calendar year:
- You made fewer than 30 sales.
- You took no more than 2,000 euros, roughly £1,700.
Reports reach HMRC by 31 January for the previous calendar year, and the platform must send you a copy of what it reported. Some services, such as delivery and ride apps, can be reported without those limits applying.
A report is not a tax bill. The tax rules did not change in 2024. What changed is visibility: HMRC can now compare platform data with what people declare.
£3,000: announced, but not law
In its Spring 2025 tax update, the government confirmed that the Self Assessment reporting threshold for trading income will rise to £3,000 gross. The thresholds for property income and other taxable income will align at the same figure.
Here is what that change would do when it starts:
- Up to 300,000 people would no longer need to file a full Self Assessment return.
- Around 90,000 of them would have no tax to pay and nothing to report at all.
- Everyone else below £3,000 could report and pay through a new, simple online service instead of a full return.
And here is what it would not do. It does not raise the tax-free amount. Income above £1,000 stays taxable, as ministers confirmed in Parliament in July 2025. The change alters how you report, not whether you owe.
No start date has been announced. The government says the change will land at some point within this Parliament. Until it does, the £1,000 rules in the first section are the rules. Some websites already describe the £3,000 threshold as live. It is not.
Selling your own stuff is not a side hustle
Clearing out possessions you no longer want is not trading. Selling your old clothes, furniture or phone does not make you a sole trader.
Most personal possessions sold for under £6,000 sit outside Capital Gains Tax as well. Buying goods to resell, making things to sell, or offering services regularly is different. That is trading, and the £1,000 test applies.
What to do now
Add up your gross side income for the tax year. Use the total across every platform and activity, before costs. GOV.UK’s checker can help you confirm whether you need to tell HMRC about additional income.
Check the 5 October deadline if you crossed £1,000 in 2025/26. That registration deadline has now passed. If you missed it, register anyway and do it soon.
Keep your records. Save invoices, platform statements and receipts. Keep the copy of the report your platform sends you each January. It is the same data HMRC holds.
Do not wait for the £3,000 rule. It has no start date. Working to it early could leave you unregistered and filing late.
Frequently Asked Questions
No. There is no separate tax for side income. The same income tax rules apply as before. What changed in 2024 is that platforms now report seller data to HMRC, so the income is easier for HMRC to see.
Generally, no. Gross trading income of £1,000 or less is covered by the trading allowance, with no tax to pay and nothing to report for that income. If you already file a tax return for another reason, you still include it.
Not yet. The £3,000 reporting threshold has been announced but has no start date. Today you register for Self Assessment, file a return, and deduct either the £1,000 allowance or your actual expenses.
No. A report is information, not a bill. If you were selling your own possessions, there is usually no tax at all. If you were trading, tax depends on your profit and your other income.
No. You choose one or the other for the tax year. Claim whichever gives the lower taxable profit.
No. The trading allowance is tested on your trading income alone. Your salary is taxed through PAYE as usual, although your total income decides the rate at which your side hustle profit is taxed.
Disclaimer:
This guide provides general information about the tax rules for side income as of October 2026. Tax rules and government announcements can change. Nothing in this article is tax advice. Always consult with a qualified tax professional about your specific circumstances. That’s what we’re here for. In accordance with our normal practice we give this reference in good faith and in confidence, without legal liability on the part of the author or the company. The author assumes no responsibility or liability for any errors or omissions in the content of this site
The information provided in this blog is for general guidance and educational purposes only and does not constitute financial, tax, accounting or legal advice. iFiler, registered in England under Company Registration Number 15996173, has prepared this content to offer general insights into financial and taxation matters. Although we make every effort to ensure the accuracy and relevance of the information at the time of publication, we give no guarantee regarding completeness, accuracy or suitability for your specific circumstances.
Readers should not act, or refrain from acting, based solely on the information contained in this content. Always get professional advice tailored to your personal or business situation before making any financial or tax-related decision. iFiler accepts no liability for any loss or damage arising from reliance on the information in this blog.
