Millions of Britons now earn something on the side — selling on Vinted and eBay, delivering, tutoring, renting a spare room, freelancing. Since April 2026 the tax landscape around that income has changed in one important way: digital platforms are now legally required to report what you earn directly to HMRC. Here's how the rules actually work, who needs to do anything, and the mistakes to avoid.
The trading allowance means the first £1,000 of gross trading income in a tax year is tax-free, and if your total side income is under that figure you usually don't need to register or file anything at all. Note the word gross — it's your takings before any costs, not your profit.
Cross £1,000 gross and you must register for Self Assessment. That doesn't necessarily mean a big bill: you can either deduct the £1,000 allowance from your income, or deduct your actual expenses instead — whichever is better for you (you can't do both).
Clearing out your wardrobe on Vinted or eBay is generally not trading and not taxable — you're selling personal possessions, usually at a loss. The tax question arises when you buy or make things in order to sell them, or provide services for payment. Volume and intent are what HMRC looks at.
Under international rules the UK adopted, platforms such as eBay, Vinted, Etsy, Airbnb, Uber and Deliveroo must now share sellers' earnings data with HMRC. In practice this means HMRC increasingly already knows your platform income before you tell them. The rules didn't create any new tax — but they've removed the "nobody will notice" option, and HMRC has been writing to sellers whose reported income looks like undeclared trading.
| Your gross side income | What you need to do |
|---|---|
| £1,000 or less | Usually nothing — covered by the trading allowance |
| Over £1,000 | Register for Self Assessment; pay tax on the excess over allowance or expenses |
| Renting a room in your home | Separate Rent a Room scheme — up to £7,500 a year tax-free |
The government has signalled an intention to raise the trading allowance reporting threshold to £3,000, which would take hundreds of thousands of small sellers out of Self Assessment. As of mid-2026 this has not been legislated — so the £1,000 rule still applies. Separately, Making Tax Digital will gradually move self-employed people to quarterly digital reporting, starting with larger incomes. If your side hustle is growing, get comfortable with software early.
Add your side hustle earnings to our free budget calculator and see what they really contribute after costs.
🧮 Open Budget Calculator⚠️ SmartBudgetUK.co.uk is not a financial adviser and this article is general information, not personal advice. Figures were checked in July 2026 but change over time — always confirm current rates, allowances and scheme rules directly with providers, HMRC and gov.uk before making decisions.