Quick answer: from 6 April 2027, the threshold for reporting side-hustle (trading) income to HMRC rises from £1,000 to £3,000. If your gross side-hustle income is under £1,000, it’s tax-free and you don’t need to report it. Between £1,000 and £3,000, you won’t need a full Self Assessment tax return, but tax may still be due through a new, simpler online service. Above £3,000, normal Self Assessment rules apply. Selling your own unwanted things is usually not trading at all.
If you sell crafts on Etsy, digital downloads, do a bit of dog walking or pet sitting, or tutor in the evenings, this change was made with you in mind. It’s been talked about for a while and Budget coverage on 28 October 2026 put it back in the spotlight, so here’s what it really means for your side hustle.
Side hustle tax rules: now vs from April 2027
| Gross side-hustle income a year | Until 5 April 2027 | From 6 April 2027 |
|---|---|---|
| Up to £1,000 | Tax-free, nothing to report (Trading Allowance) | Tax-free, nothing to report |
| £1,000 to £3,000 | Register for Self Assessment and file a tax return | No full tax return needed; tax may still be due via a simpler online service |
| Over £3,000 | Self Assessment | Self Assessment |
Important: these figures are based on your gross income (what customers pay you), not your profit. Some coverage calls this the “Trading Allowance tripling to £3,000”, but the government’s announcement describes it as a reporting threshold. I’ll update this guide as soon as HMRC publishes the final rules.
Is selling on Vinted or eBay a side hustle?
Usually not. Selling your own pre-loved clothes, toys or household bits for less than you paid is not trading, so there’s no income tax to pay. It becomes trading if you buy things to resell for profit, or make items to sell.
Platforms like Vinted, eBay and Etsy now report seller data to HMRC if you make 30 or more sales, or earn about £1,700 (€2,000) or more in a calendar year. A report doesn’t mean you owe tax; it just means HMRC can see the figures. Read my Vinted guides for more.
Do I have to pay tax between £1,000 and £3,000?
Possibly. The £1,000 Trading Allowance is still the tax-free amount, unless HMRC confirms otherwise. Above it, you either:
- use the £1,000 allowance and pay tax on the rest, or
- deduct your real expenses (materials, postage, fees) and pay tax on your profit. You can’t do both.
Your profit is added to your other income, so if you’re a basic-rate taxpayer you’d pay 20% income tax (and possibly National Insurance if profits are higher). The new service should make reporting this much simpler than a full tax return.
How to keep your side hustle tidy (5 simple habits)
- Use a separate bank account for side-hustle money in and out.
- Keep a simple spreadsheet of sales and costs each month.
- Save receipts for materials, postage and platform fees.
- Put aside 20% of profit above £1,000, just in case.
- Check your total each April so you know which band you’re in.
Looking for ideas to grow your income? Browse my side hustle guides and see what else changed in my Budget 2026 round-up.
Side hustle tax FAQs
Is the trading allowance going up to £3,000?
The threshold for reporting trading income rises from £1,000 to £3,000 from 6 April 2027. The government has described it as a reporting threshold, so income above £1,000 may still be taxable.
Do I need to tell HMRC about my side hustle?
Until 5 April 2027, yes if your gross trading income is over £1,000. From 6 April 2027, you will not need a full Self Assessment return if it is £3,000 or less, but tax may still be due through a simpler service.
Do I pay tax on Vinted sales?
Not usually. Selling your own unwanted items for less than you paid is not trading. Buying to resell or making items to sell can be trading.
Will Vinted and eBay report me to HMRC?
Platforms report sellers who make 30 or more sales or earn about £1,700 (€2,000) or more in a calendar year. That does not mean you owe tax.
When does the £3,000 side hustle threshold start?
From the 2027/28 tax year, starting 6 April 2027.
Sources
- Alliotts: trading allowance reporting threshold to rise to £3,000
- Enterprise Nation: trading income threshold to increase
- GOV.UK: Trading and property allowances
Last updated: 28 October 2026. General information, not tax advice. Rules may change once HMRC publishes guidance.
Plan your next money step
My free 7-Day Financial Reset Kit helps you review household spending. If you prefer a paid planner, my Bills & Renewal Dashboard gives you a place to keep your own figures and reminders.
This is general information, not personal financial advice. Check official guidance and current retailer terms for your circumstances. Financial disclaimer.
About the author: Dr Kalpana Govindaraasan is the PhD scientist, former secondary science teacher and mum behind MoneySavvyUK, turning complex household money topics into practical steps.