HMRC has launched a new summer campaign reminding people with side income — from wedding services and online selling to content creation and freelance work — that this income may need to be declared for tax purposes.
With platforms such as Vinted, eBay, Etsy, Airbnb and various gig-economy apps now required to share seller data directly with HMRC, undeclared income is far easier to spot than it once was. If you have a side income stream, now is a sensible time to check where you stand.
The £1,000 Trading Allowance
The key threshold to know is the £1,000 trading allowance. If your total income from side activities — before expenses — exceeds £1,000 in a tax year, you may need to register for Self Assessment and declare that income to HMRC.
Not Every Sale Is Taxable
It’s worth stressing that not everyone selling online has a tax issue. Selling your own unwanted possessions is generally not treated as trading and is usually outside the scope of tax. However, HMRC is likely to treat you as trading — and therefore liable to tax — if you are:
- Regularly buying or making goods with the intention of reselling them for profit
- Providing a service in exchange for payment, on a recurring basis
What You Should Do
If any of this sounds familiar, we’d suggest the following:
- Review your income streams — list out anything you’re earning outside your main employment or business.
- Check the £1,000 threshold — has your total trading income for the tax year gone over this figure?
- Register for Self Assessment, if required, before HMRC contacts you first.
- Keep clear records from day one — invoices, receipts, bank statements — rather than trying to reconstruct them retrospectively.
Why Early Action Matters
Coming forward voluntarily is almost always more straightforward, and considerably less costly, than responding to an HMRC enquiry after the fact. Penalties and interest can apply where income has gone undeclared, and the process of establishing figures from scratch under enquiry is rarely pleasant.
Not sure whether your side income needs declaring? Our team can review your circumstances, confirm your Self Assessment obligations, and get your records in order — whether your side income comes from freelancing, content creation, property, or overseas sources. Get in touch with us for a confidential discussion.