New HMRC £1,000 tax alert for anyone selling items in 'side hustle' message

New HMRC £1,000 tax alert for anyone selling items in 'side hustle' message Many Brits are finding ways to earn extra income, whether that's selling handmade products, providing services, creating online content HM Revenue and Customs (HMRC) has issued a fresh reminder to anyone with a 'side hustle'. On Monday, October 26, the government department shared several pieces of information that people running their own small businesses should be aware of. In recent years, more and more people are finding creative ways to pursue their passions and earn extra income while balancing family life. Whether selling handmade accessories, creating content online or turning your passion for baking into a business, a side hustle can be a flexible way to bring in some extra money. But once your hobby starts generating income, it's important to understand whether there are any tax responsibilities and whether you need to register for Self Assessment. Kevin Hubbard, Director of Small Business and Individuals from HMRC, has answered some of the most common tax questions about side hustles - including a £1,000 alert. Even if your hobby is something you only do in your spare time, you may still need to tell HMRC. Once a hobby starts generating income, you need to consider whether you have tax obligations. If it is more than £1,000 in a tax year, you will need to tell HMRC and check if you need to pay tax, even if it began as a passion project. The £1,000 figure is known as the trading allowance, and it covers all your side hustle income added together, not each activity separately. When in doubt, the 'where is your additional income from?' tool on GOV.UK can help clarify your position in a few minutes. What counts as a side hustle? A side hustle is any extra income you earn outside of your main job. Many successful side hustles start as hobbies. This often includes things like making and selling crafts, kids' clothing or accessories; offering services such as childminding, photography, beauty treatments, dog walking, tutoring, or fitness classes; and content creation and influencing, such as posting parenting or lifestyle content on social media. A hobby can become a side hustle once you're regularly selling for payment rather than simply making things as gifts. If your income from this is more than £1,000 in a tax year, whether alone or combined with any other side hustles, you need to let HMRC know. What if I'm doing a few different things? All your side hustle income counts towards the £1,000 threshold combined. For example, if you earn £600 from selling handmade items and £500 from tutoring in a tax year, your total is £1,100, which means you'd need to let HMRC know. Do I need to declare that I'm selling used items I own? No. Selling your own unwanted personal belongings, such as decluttering a wardrobe or passing on outgrown kids' items, usually doesn't count as trading and doesn't need to be reported. The key difference is intention and regularity. If you're regularly buying or making things specifically to sell for profit, or providing a service for payment, that is likely to count as trading. I post about products on social media and sometimes get paid or sent free products. Does that count as income? Yes, content creation and influencing are a key area covered by HMRC's Tax Help for Hustles guide. Payment doesn't have to be cash to count. Gifted products, free services or other non-cash benefits received in exchange for posts can also count as taxable income, depending on the circumstances. If you're earning money or benefits in kind from sponsored content, affiliate links or brand partnerships, it's worth checking your position on GOV.UK. When do I need to declare my income? What are the key dates I need to know? For the 2025 to 2026 tax year, the deadline for submitting online Self Assessment tax returns and paying any tax due is 31 January 2027. If you earned more than £1,000 from a side hustle in 2025/26 and have not previously needed to register for Self Assessment, you should register with HMRC as soon as possible. If you started your side hustle in the 2026 to 2027 tax year, you will need to register for Self Assessment from 6 April 2027. What happens if I miss the deadline? You may face penalties, so it's important to register, submit your tax return and pay any tax owed on time. What if my side hustle has slowed down, or I've stopped altogether? If you no longer need to file a Self Assessment return because you have stopped trading, sold your business, retired or ceased self-employment for another reason, you should tell HMRC as soon as possible to avoid a late-filing penalty, even if you have no tax to pay. HMRC won’t automatically know if your circumstances have changed.