HM Revenue and Customs (HMRC) has issued a crucial alert to festive entrepreneurs and Christmas crafters across the UK. The tax authority is urging anyone earning extra money from seasonal side hustles to check their tax obligations immediately.
When does your festive hobby become a taxable business?
The central point of HMRC's 'Help for Hustles' campaign is the £1,000 trading allowance. This means if your total income from trading activities – such as selling handmade Christmas decorations, upcycled furniture, or running a seasonal market stall – exceeds this amount, you must inform HMRC.
It is vital to understand the difference between selling personal items you no longer want, which does not typically need to be reported, and actively making or sourcing goods to sell for a profit. The latter is considered trading and may be subject to tax once you cross the income threshold.
What you need to do before the January deadline
For the 2024 to 2025 tax year, anyone whose side hustle earnings surpassed £1,000 must register for Self Assessment as a sole trader. The deadline to file your tax return and pay any tax due is 31 January 2026.
HMRC emphasises that the £1,000 limit applies to your combined income from all trading activities. For example, if you earned £600 from selling crafts and £500 from content creation, your total of £1,100 means you are required to register.
Official advice for seasonal traders
Kevin Hubbard, HMRC’s Director of Individuals & Small Business Compliance, stated: "Whether you’re making handmade Christmas decorations, selling upcycled furniture, or running a seasonal market stall, it’s important to understand when your festive side hustle becomes taxable trading. Nobody wants an unexpected tax bill, so anyone earning more than £1,000 from their side hustle should tell HMRC."
Supporting the guidance, Graham Wilson OBE, Deputy Chief Executive of the National Association of British Markets, commented: "Markets are an important part of Christmas celebrations... we want to encourage all traders, particularly those who are trading for the first time, to be clear about their obligations for tax arising from their earnings."
HMRC's campaign aims to provide clear and straightforward information to help people get their tax right and avoid potential penalties for non-compliance.
