By Salma El-Sakka
The UK government will raise the tax-free allowance for side-hustle income from £1,000 to £3,000 starting April 2027, Chancellor John Healey announced in the Budget.
New threshold and reporting rules
From April 2027, anyone earning more than £3,000 in a tax year from trading activities — such as reselling goods, tutoring, or dog-walking — must register for Self Assessment with HM Revenue and Customs. The current £1,000 threshold will be lifted, and the tax year runs from 6 April to 5 April. The £3,000 figure applies to gross income before deducting expenses.
What counts as trading
HMRC classifies buying items to resell for profit, upcycling furniture, selling wholesale vintage bundles, and offering digital products like art prints as trading. Selling unwanted personal belongings such as old clothes or toys is not usually taxable unless a single item sells for more than £6,000.
Platform reporting and compliance
Online platforms including eBay and Vinted are now required to report sellers who make more than 30 sales or earn over £1,700 in a year. HMRC holds data on those sellers, and traders must register by 5 October each year.
Distinguishing hobby from side hustle
A side hustle is self-employed work outside a main job, distinct from a second PAYE employment. HMRC currently treats earnings above £1,000 a year as a business, rising to £3,000 in April 2027. Individuals are responsible for declaring any taxable income themselves.
