Almost everyone selling something on the side has heard there's a £1,000 limit. Very few people have been told what it actually means. So here it is, without the jargon.
The £1,000 trading allowance
You can normally earn up to £1,000 a year from self-employment or casual trading without telling HMRC. That's the trading allowance. Go over it and you generally need to register for Self Assessment and file a return.
Two things trip people up.
It's measured before expenses. The test is on what comes in, not what you keep. Turn over £3,000 selling prints and spend £2,400 on framing and postage, and you're over the line. Your profit is only £600, but the allowance looks at the £3,000.
It's one allowance, not one per platform. Sell on Etsy, do a bit of freelance design, and walk a few dogs, and HMRC adds it all together. It's £1,000 across everything, not £1,000 each.
The dates that matter
If you need to file a tax return for the first time, there are two deadlines, and the first one is the one people miss.
- 5 October after the end of the tax year: the date to register with HMRC. For the tax year that ended 5 April 2026, that's 5 October 2026.
- 31 January: the date your online return has to be filed and the tax paid. For 2025/26, that's 31 January 2027.
Register late and you can face a penalty based on the tax you owed. Register on time and file late and the penalties are separate again.
Registering is free on GOV.UK. Nobody needs to pay for that part.
HMRC can see more than it used to
Since 2024, online platforms have had to collect seller details and report earnings to HMRC each year. Marketplaces, gig apps, short-term lets. If you're selling regularly through a platform, assume your numbers are already on a spreadsheet somewhere in HMRC.
That doesn't mean everyone selling something is trading. Clearing out your wardrobe isn't a business. Buying stock to sell at a profit, or offering a service for money, is. If you're unsure which side of the line you're on, that's a two-minute conversation, not a crisis.
If your side hustle is content — brand deals, gifted products, ad revenue — the rules have some extra wrinkles worth reading about in our guide to tax for influencers and content creators.
What "registering" actually involves
You tell HMRC you're self-employed, you get a Unique Taxpayer Reference in the post, and from then on you file a return once a year covering your side-hustle income. You still get your personal allowance. You still pay tax only on your profit. Being registered is not the same as owing money.
Most people who come to us braced for a nasty bill find the actual number is smaller than the dread was.
One thing to plan for: once you're in Self Assessment, Making Tax Digital for Income Tax is coming, and it replaces the single annual return with quarterly updates for people over the income threshold.
What to do this week
- Add up everything your side hustle brought in between 6 April 2025 and 5 April 2026. Gross, before costs.
- If it's over £1,000 and you've never filed a return, register with HMRC.
- Start keeping receipts now, in one place. Your future self in January will thank you — and our guide to the expenses most people forget to claim shows what's worth keeping.
- If you've already missed 5 October, deal with it rather than ignoring it. It gets more expensive the longer it sits.
How we help
We register you, keep your books, and file the return. Fixed fee from £39/month + VAT. FreeAgent and Dext included. No hourly billing, so asking a question never costs you anything. You can see the full breakdown on our pricing page.
Message us on WhatsApp on 07597 802579. A real accountant replies — not a bot.