HMRC is warning thousands of Britons who earn extra money from festive side hustles like running a stall at Christmas markets or selling items online to check if they need to declare their earnings.
As the holiday season approaches, HM Revenue & Customs' Help for Hustles campaign is reminding those who make items to sell for profit - such as handmade decorations or vintage clothing - that they may be subject to tax. The £1,000 trading allowance per year allows you to earn extra income from a side hustle without paying tax, but if you exceed this limit, you'll need to register as a sole trader and file a tax return.
HMRC's guidance makes clear the distinction between decluttering your home by selling unwanted personal belongings - which doesn't usually need reporting - and trading activities that can be taxable. Anyone earning more than £1,000 from side hustles in the 2024-25 tax year will need to comply with these rules.
Christmas sales this year will fall into the next tax year, and you'll need to declare and pay any tax due by January 2027. However, if your total earnings - including expenses - exceed £1,000, you'll need to register for self-assessment and file a tax return.
While registering for self-assessment doesn't guarantee you'll owe tax, you may be able to deduct allowable business expenses from your income, which can lower your tax bill. HMRC's website provides more information on what constitutes an allowable expense.
The rules apply all year round and cover various ways people make money outside their main job, including selling items, providing services, and creating content. Even online content creators and influencers who earn extra cash from making videos or social media posts will need to comply with these regulations.
Importantly, if you're working out your income from creating online content, any gifts or services received in exchange for promoting products must be included as income. HMRC also emphasizes the importance of keeping accurate records of all sales, income, and business expenses - even if using a tax agent or accountant.
As the holiday season approaches, HM Revenue & Customs' Help for Hustles campaign is reminding those who make items to sell for profit - such as handmade decorations or vintage clothing - that they may be subject to tax. The £1,000 trading allowance per year allows you to earn extra income from a side hustle without paying tax, but if you exceed this limit, you'll need to register as a sole trader and file a tax return.
HMRC's guidance makes clear the distinction between decluttering your home by selling unwanted personal belongings - which doesn't usually need reporting - and trading activities that can be taxable. Anyone earning more than £1,000 from side hustles in the 2024-25 tax year will need to comply with these rules.
Christmas sales this year will fall into the next tax year, and you'll need to declare and pay any tax due by January 2027. However, if your total earnings - including expenses - exceed £1,000, you'll need to register for self-assessment and file a tax return.
While registering for self-assessment doesn't guarantee you'll owe tax, you may be able to deduct allowable business expenses from your income, which can lower your tax bill. HMRC's website provides more information on what constitutes an allowable expense.
The rules apply all year round and cover various ways people make money outside their main job, including selling items, providing services, and creating content. Even online content creators and influencers who earn extra cash from making videos or social media posts will need to comply with these regulations.
Importantly, if you're working out your income from creating online content, any gifts or services received in exchange for promoting products must be included as income. HMRC also emphasizes the importance of keeping accurate records of all sales, income, and business expenses - even if using a tax agent or accountant.
. I've been selling my old clothes online for years and never had to pay any tax on it. The £1k allowance just seems like a nice cushion to have, but if you're already making decent money from your main job, what's the harm in just keeping track of your side hustle income? And honestly, who hasn't decluttered their home at some point and sold stuff they no longer needed? 
It feels like we're being treated like tiny entrepreneurs or something 
. Can't we just keep it simple?
. and what if i make more than that? do i have to register as a sole trader or something? thats kinda overwhelming 
. also, i wasnt expecting to have to keep track of all my expenses too... seems like a lot of work just to make some extra cash 
. maybe ill look into using a tax agent or accountant though? that way im sure im doing it right 
.
For real tho, £1k is a pretty arbitrary number - can't we just pay taxes on whatever we make and not have to worry about the allowance thing? It sounds like more work for some people than others... maybe HMRC should just create a special side hustle tax calculator or something 
especially during xmas season! HMRC is being super clear that u might need to pay tax on earnings above £1k 
so make sure u get all ur numbers straight. and don't even think about using the £1k trading allowance as a loophole 
. register for self-assessment if u earn more than that & claim allowable business expenses 2 reduce ur tax bill 
! It's so important to know that we're not just decluttering our homes, but also making some serious cash from those side gigs 
.
.
!