Do You Have to Pay Tax on Side Hustle Income?
Whether you’re selling on eBay, designing on Etsy, or picking up freelance work, side hustle income can add up fast — and HMRC may expect a slice. But when does it become taxable?
The £1,000 Trading Allowance
The UK has a £1,000 trading allowance. This means you can earn up to £1,000 per tax year from self-employment or casual sales without paying any tax or filing a tax return.
This applies to income from:
- Selling items online (eBay, Vinted, Facebook Marketplace)
- Freelance services (writing, design, web dev)
- Crafts or handmade goods
- Tutoring or coaching
- Any other form of side hustle
If your total gross income (before expenses) is £1,000 or less in the 2025/26 tax year, you don’t need to tell HMRC.
When You Must Report Side Income
You’ll need to register for Self Assessment and possibly pay tax if:
- You earn more than £1,000 in gross income from self-employment
- You want to claim expenses instead of using the trading allowance
- You already file a tax return and want to report your side income properly
Learn more in our guide: Do I Need to File a Self Assessment Tax Return?
Is Selling on eBay or Vinted Taxable?
It depends on whether you’re trading or just selling personal items:
- Occasional sales of second-hand items (e.g. used clothes) are usually not taxable
- Regular selling for profit (buying to resell or making crafts) may count as a business and is taxable
What If You’re Paid Through PayPal or Bank Transfer?
HMRC doesn’t care how you’re paid — if you’re earning more than £1,000, you may need to report it regardless of platform.
From 2025, digital platforms like eBay and Etsy must report seller income to HMRC, so side hustle income is becoming more visible.
Tips for Staying Compliant
- Keep a simple record of income and expenses
- Register for Self Assessment early if required
- Keep receipts and invoices if claiming expenses
- Set aside money for tax (usually 20–30% of profits)