This is general information for education. It is not tax advice. Rules, allowances, and thresholds change — use GOV.UK/HMRC and a qualified accountant for your situation.
The core questions
- Are you trading or occasionally selling personal items?
- How much profit are you making after allowable costs?
- Do you need to report via Self Assessment?
- Does VAT become relevant?
- If you have an employer, does anything affect your employment contract or policies?
Trading vs casual
Selling your old sofa once is different from repeatedly buying stock to resell for profit. Frequency, profit-seeking, and organisation matter. When unsure, read current HMRC guidance and ask a professional.
Records even when small
Keep:
- Sales logs
- Cost receipts
- Platform statements (Etsy, eBay, etc.)
- Mileage logs if claiming travel carefully
See bookkeeping minimum.
Allowances and thresholds (do not hardcode folklore)
Forums and old blog posts keep repeating figures from years ago. The current trading allowance, registration deadlines, platform-reporting rules and Making Tax Digital thresholds are listed with their sources in the numbers for 2026/27 below. Always check them again for the tax year you are filing.
Side hustle + full-time job
- Check employment contract for conflicts
- Do not use employer IP/time/equipment against policy
- Plan Self Assessment deadlines in your calendar
When structure changes
If side income becomes primary income, revisit:
- Sole trader vs limited
- Pricing if you start selling services
- Insurance needs
Practical habits
| Habit | Why |
|---|---|
| Separate account pot | Cleaner tracking |
| Monthly profit glance | No year-end shock |
| Tax buffer sweep | January is calmer |
| Deadline calendar | Penalties are real |
The numbers for 2026/27, with sources
The figures below come from GOV.UK and apply to the 2026/27 tax year (6 April 2026 to 5 April 2027). Check them again before you file, because thresholds are set each year.
- Trading allowance: £1,000. If your total gross trading income (before costs) is £1,000 or less in a tax year, you don't need to tell HMRC or pay tax on it. Above that, you can either deduct the £1,000 allowance or your actual allowable expenses, not both. If your costs are higher than £1,000, deducting actual expenses is usually better.
- Registering for Self Assessment. If you need to report trading income, register by 5 October after the end of the tax year in which you started. For income that began in 2026/27, that's 5 October 2027.
- Filing and paying. Online returns and any tax owed are due by 31 January after the tax year ends, so 31 January 2028 for 2026/27. Late filing brings an automatic £100 penalty, rising after three months.
- Platform reporting. Since January 2024, online marketplaces such as eBay, Etsy and Vinted have had to collect sellers' details and report their sales to HMRC. Platforms report when a seller makes 30 or more sales, or earns about £1,700 (€2,000) or more, in a calendar year. Being reported doesn't mean you owe tax; selling your own unwanted things isn't trading. It does mean HMRC can see the income.
- Making Tax Digital. From 6 April 2026, sole traders and landlords whose combined gross self-employment and property income was over £50,000 must keep digital records and send quarterly updates. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028, based on earlier years' returns.
- VAT registration. Required once your taxable turnover passes £90,000 in any rolling 12 months.
If you're close to any of these lines, a one-off session with an accountant costs less than getting it wrong.
Related
Disclaimer
Not tax advice. Tabaconda LLC publishes general educational content. Your obligations depend on your facts and current law.
Mindset
Side income is still income. HMRC does not care that it started as a hobby if you are trading.
Practical steps
- Separate pot or account for tax
- Track costs that are wholly for the hustle
- Know if you need to register for Self Assessment
- Keep platform statements (Etsy, freelance sites, etc.)
This is not personalised tax advice — verify on GOV.UK or with an accountant when sums matter.