Tax-free side hustle allowance trebled to £3,000 from April

Summarised from 4 outlets · 5 reports · Updated 30 Oct, 13:27 · Archive

The tax-free trading allowance for side hustles will treble from £1,000 to £3,000 in April 2027, benefiting up to 1.4 million people.

The Chancellor has announced that the tax-free trading allowance will treble from £1,000 to £3,000 in April 2027. The change is intended to support people starting a business and will benefit up to 1.4 million people who earn extra income through side hustles.

Side hustle culture has seen explosive growth in recent years as households face rising bills and costs. Popular ways of earning extra money include selling items on platforms such as eBay, Vinted and Etsy, as well as dog-walking, tutoring and online work. Last year, 2.6 million people made money selling goods through these platforms, according to data from HM Revenue and Customs. This represents a dramatic increase from just 450,000 people in 2024.

Currently, people can earn up to £1,000 a year from a side hustle before needing to pay tax, provided their total income including their main job exceeds the £12,570 personal allowance. From April 2027, this threshold will rise to £3,000. The change means that from that date, anyone earning more than £3,000 in a tax year from side hustles will need to inform HMRC.

The increase will have a significant impact on those with modest side incomes. An estimated 400,000 people will see their tax bill reduced, with an average saving of £380. About 100,000 people will no longer need to report their trading income to HMRC at all, reducing administrative burden. Sarah Coles, head of personal finance at AJ Bell, said the more generous allowance "doesn't just save tax, it also takes the hassle of admin off their plate", allowing people to spend more time working for themselves and less time on paperwork.

The platform data requirement came into force last year, requiring services such as eBay to inform HMRC about their sellers and earnings. HMRC now receives information about every seller who made 30 sales or £1,700 on any platform in the past year. This has given the taxman unprecedented visibility into the side hustle economy, which has been largely informal until recently.

It is important to note that selling your own unwanted belongings does not automatically count as trading for tax purposes. There is a distinction between clearing out a wardrobe and regularly buying items specifically to resell for profit. The tax-free allowance applies to the latter activity, though the rules around when casual selling becomes taxable trading remain complex.

How it is being reported

• Tax-free income allowance to rise by £2,000: Here’s what it means for Vinted sellers and side-hustlesLast year 2.6 million people made money selling items on eBay, Vinted and Etsy, according to HMRCThe Independent · 30 Oct, 10:59
• UK side-hustle tax-free allowance to rise to £3,000 next yearUp to 1.4 million people could benefit from change to trading allowance announced in budget, with some saving hundreds in tax The amount Britons can earn from a side hustle without paying tax will rise to £3,000 next year in a fillip for those who make extra cash from hobbies or reselling. Up to 1.4 million people could benefit from the change announced in the budget , with the chancellor confirming the tax-free “trading” allowance will increase from £1,000 to £3,000 in April 2027. Continue reading...The Guardian · 30 Oct, 07:00
• Boost for eBay and Vinted sellers as amount of side hustle money you can earn tax-free rises to £3,000The trading allowance is being tripled from £1,000 a year to £3,000 - this is the amount of money you can earn tax-free in casual incomeThe Mirror · 29 Oct, 11:55
• Side hustle boost: Vinted and eBay sellers see tax-free trading allowance trebled to £3,000The amount of money people can earn in 'side hustle' jobs before paying tax has trebled from £1,000 to £3,000 in the Budget.Daily Mail · 28 Oct, 17:54
• Side hustle boost: Vinted and eBay sellers see tax-free trading allowance trebled to £3,000The amount of money people can earn in 'side hustle' jobs before paying tax has trebled from £1,000 to £3,000 in the Budget.This is Money · 28 Oct, 17:48

In this story: John Healey · eBay · Vinted · HMRC · Etsy · United Kingdom

This summary was written by AI from the headlines and standfirsts above, and states as fact only what at least two outlets report. How we use AI · Report a problem · Corrections log