Do I need to tell HMRC about my side hustle?

Updated 21 October 2026 · For the 2025/26 tax year (return due 31 January 2027)

Short answer: if your side hustle brought in more than £1,000 in gross income between 6 April 2025 and 5 April 2026, you need to tell HMRC by registering for Self Assessment and filing a return by 31 January 2027. If it was £1,000 or less, you usually don't – but there are exceptions worth knowing.

The £1,000 trading allowance

The trading allowance is a tax exemption of up to £1,000 a year for individuals with income from self-employment, casual services (like babysitting or gardening) and hiring out personal equipment. HMRC's rule:

Gross trading income £1,000 or less – you usually don't need to tell HMRC or file a return for it. HMRC calls this "full relief". Keep records anyway.
Gross trading income over £1,000 – you must register for Self Assessment. You can still deduct the £1,000 allowance instead of your actual expenses if that's better ("partial relief").

The key word is gross. If you sold £1,600 of candles but spent £900 on wax and postage, your profit is £700 – but your gross income is £1,600, so you must register. The allowance covers all your trades combined, not £1,000 per hustle.

When you must register even under £1,000

According to GOV.UK, you need to register and file even if your trading income is £1,000 or less if, for example:

you made a loss and want to claim relief for it
you want to pay voluntary Class 2 National Insurance to protect your entitlement to benefits like the State Pension
you want to claim Tax-Free Childcare or Maternity Allowance based on your self-employment

The allowance also can't be used against income from your employer (or your spouse's or civil partner's employer), or from a company or partnership you're connected to.

Is it a side hustle or just a clear-out?

Not every sale is trading. Selling your own unwanted things – old clothes on Vinted, a sofa on Facebook Marketplace – is generally not trading and not taxed as income. It's more likely to be trading if you:

buy items with the intention of reselling them at a profit
make things to sell (crafts, prints, candles)
sell regularly, in volume, or advertise like a business
provide a service for payment (design, tutoring, dog walking)

HMRC's guide Check if you need to tell HMRC about your income from online platforms has worked examples. (Selling a valuable personal item for more than you paid can raise Capital Gains Tax, which is a separate question.)

HMRC can now see platform sales

Since 1 January 2024, UK digital platforms such as online marketplaces must collect information about sellers and report it to HMRC each January. Platforms don't need to report sellers with fewer than 30 sales of goods and 2,000 euros (about £1,700) or less in a year. Being reported doesn't mean you owe tax – and not being reported doesn't mean you don't. The £1,000 trading allowance test is what decides whether you need to tell HMRC.

How to tell HMRC

Register for Self Assessment as a sole trader on GOV.UK. You'll get a Unique Taxpayer Reference (UTR) by post.
Keep records of your sales and costs. Five years after the 31 January deadline is the minimum HMRC asks for.
File your return online by 31 January 2027 for 2025/26, including the self-employment pages (SA103S for most side hustles).
Pay your Income Tax and any Class 4 National Insurance by the same date.

The registration deadline is 5 October after the end of the tax year – 5 October 2026 for 2025/26. If you've missed it, register now. You can be charged a "failure to notify" penalty if you register late and don't pay all your tax by 31 January, so paying on time matters most.

How much tax will I actually pay?

Your side hustle profit is added to your other income. If you have a job that already uses your £12,570 Personal Allowance, profit is taxed at 20% (basic rate, England, Wales and NI) up to £50,270 total income, and 40% above that. Class 4 National Insurance is 6% on profits between £12,570 and £50,270 – but that threshold looks at your self-employed profit only, so many people with a small side hustle pay no Class 4 at all. Scotland has its own Income Tax bands.

Example: Priya earns £30,000 in her job and makes £2,400 profit from freelance illustration. She'll pay about £480 Income Tax (20%), no Class 4 NI (profit under £12,570), and because her bill is under £1,000, no payments on account.

Don't panic if you're behind

If you should have registered in an earlier year, HMRC's advice is to come forward. Telling them yourself generally means lower penalties than if they find you. Our 31 January 2027 deadline guide covers the countdown.

Get your 2025/26 numbers sorted

January Sorted is a £17 spreadsheet tracker for UK side hustles: it compares the trading allowance with your expenses, estimates your tax, NI and payments on account, and lays out your SA103S figures box by box. Excel & Google Sheets.

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Frequently asked questions

How much can I earn from a side hustle before telling HMRC?

If your gross trading income (sales before any costs) is £1,000 or less in a tax year, you usually don't need to tell HMRC, thanks to the trading allowance. Over £1,000 gross, you must register for Self Assessment.

Is the £1,000 based on profit or sales?

Sales. The test uses gross income – the total you received before deducting expenses or fees – not profit.

Do I pay tax on selling my old clothes?

Usually not. Selling your own unwanted personal belongings is generally not trading. Buying items to resell at a profit, or making things to sell, usually is.

Will HMRC know about my Etsy or eBay sales?

Platforms now collect and report seller information to HMRC under the digital platform reporting rules, so you should assume HMRC can see your sales totals.

Sources (GOV.UK, checked 21 October 2026)

General information, not tax advice. Rules can change – always check GOV.UK or speak to an accountant. January Sorted is not affiliated with HMRC.