HMRC has effectively raised the personal tax-free allowance for individuals with side hustles to £13,570 for the 2026/27 tax year. This combines the existing £1,000 trading allowance with the basic personal allowance of £12,570. Under Labour Party government rules, the £1,000 tax-free allowance applies to all side hustle income combined, not per activity.
How the £1,000 Trading Allowance Works
For example, if you earn £800 from content creation and £500 from selling crafts online, your total side hustle income is £1,300. This exceeds the £1,000 allowance, so you must notify HMRC. The tax year runs from 6 April to 5 April. HMRC states: "If it’s from making or buying things to sell for a profit, as well as any other side hustles, you’ll need to tell us. This is the amount you earn before factoring in expenses. It is not the same as profit."
You may have to pay tax on side hustle income if your total income, including your main job, exceeds the basic personal allowance of £12,570. However, if you make £1,000 or less, you don't need to inform HMRC.
Examples of Taxable Side Hustles
HMRC provides examples of selling activities that count toward the allowance: buying items from car boot sales or charity shops to resell at a profit, upcycling second-hand furniture for sale, making and selling greetings cards online, buying wholesale vintage clothing bundles to resell individually, or doing digital design side hustles like selling downloadable wall art, screen print images, and bespoke pet portraits.
If you're simply selling unwanted personal belongings occasionally, such as old toys or clothes, online or in person, you usually don't need to tell HMRC.
Online Platform Reporting Rules
HMRC adds: "The online selling tax rules haven’t changed. You can still make up to £1,000 a year tax-free from side hustles and have been able to do this since 2017. What has changed is that online platforms must now share information with HMRC if you sell 30 items or more a year through their service. This doesn’t mean you necessarily owe tax or need to do anything."
