Side hustle tax
Selling on eBay or Vinted, freelancing on the side, renting out kit? Work out what tax your side income actually owes — using the £1,000 trading allowance or your real expenses, whichever leaves more in your pocket.
Your side income
How it's worked out
The £1,000 allowance, and what HMRC actually sees
Every individual gets a £1,000 trading allowance: gross side income under that in a tax year is tax-free and needs no return at all. One pound over and the whole picture changes, you register for Self Assessment and report the lot, with the allowance then working as a deduction rather than an exemption. Since 2024 the platforms themselves, eBay, Vinted, Etsy, Airbnb, Uber, report seller data to HMRC, so the tax office increasingly knows about the income before you tell it. The polite fiction that side money is invisible has ended.
£2,500 of selling alongside a £30,000 job
Say you earn £2,500 from a side hustle with £300 of genuine costs, on top of a £30,000 day job. You'd claim the £1,000 allowance rather than the £300 of expenses, since you get whichever you choose and the allowance is bigger. That leaves £1,500 taxable at your 20% marginal rate: £300 of tax, keeping £2,200 of the £2,500. A higher-rate earner running the same side income keeps £1,900. The calculator picks allowance or expenses automatically, which is a small decision people routinely get wrong by claiming both. You can't.
Where the rules head next
Government plans would lift the reporting threshold to £3,000 with the tax-free slice unchanged, sparing thousands of small sellers a tax return; it isn't law yet, and this page will track it. Bigger hustles have bigger milestones: consistent profits push you toward the full self-employed calculation with Class 4 NI, and gross income over £50,000 brings quarterly digital filing under Making Tax Digital, which the MTD checker dates for you. A second employed job is a different animal again: see the two jobs calculator.
Common questions
Do I pay tax on selling things on eBay or Vinted?
Selling your own unwanted possessions is usually not taxable at all. Tax applies when you are trading — buying or making things to sell for profit, or providing services for money. If that gross trading income is over £1,000 a year, it needs reporting and anything above the allowance is taxable.
What is the £1,000 trading allowance?
Everyone can earn up to £1,000 a year of gross trading income completely tax-free, with no need to register or report it. Above that, you can either deduct the flat £1,000 from your income or deduct your actual expenses — whichever is bigger — and pay tax on the rest at your marginal rate.
Will HMRC know about my side income?
Increasingly, yes. Online platforms — eBay, Vinted, Etsy, Airbnb, Deliveroo and others — are required to report sellers’ income and details to HMRC each January, so unreported side income is far more visible than it used to be. If you’ve crossed £1,000, registering for Self Assessment is the safe course.
Is the reporting threshold rising to £3,000?
The government has announced plans to raise the threshold at which side income must be reported through a full tax return from £1,000 to £3,000 of gross income — but the tax itself would not change, and the change is not yet law. Until it takes effect, the £1,000 rule applies.
These results are estimates for general information only and are not financial advice. Whether an activity counts as trading depends on the facts — check GOV.UK guidance or an adviser if unsure. Read the full disclaimer.