THE ALLOWANCE
Up to £1,000 tax free
The trading allowance is a tax exemption of up to £1,000 a year for income from self-employment, casual services and hiring out personal equipment.
Check your salesStart
WHAT HMRC GUIDANCE SAYS
Hobby or
side hustle?
Selling things you made is different from clearing out a cupboard.
HMRC treats making or buying items to sell for profit as trading, while selling your own unwanted belongings usually is not. The first £1,000 of trading income each tax year is covered by a tax-free allowance.
£1,000trading allowance a year
Check your salesKeep in mind
- Decluttering isn't trading
- £1,000 is the line
- Keep records
- Hobby income in three lines
THE SHORT ANSWER
Small sales are fine.
Trading adds up.
The £1,000 allowance covers gross trading income,
from all your side activities together.
MAKING TO SELL
Crafts can be trading
HMRC says making items to sell for profit, such as Christmas decorations or upcycled furniture, may be taxable trading. Over £1,000, you need to tell HMRC.
What to do
DECLUTTERING
Selling your own things
Selling unwanted personal belongings doesn't usually need reporting. HMRC stresses there is no new tax on occasional online selling.
Platform rulesA QUICK SALES CHECK
Do I need to
tell HMRC?
Pick a situation to see what HMRC guidance says. The bar shows how likely it is that you need to tell HMRC.
General information from HMRC guidance. Other income and circumstances can change the answer, so use HMRC's free online checker if unsure.
TWO NUMBERS WORTH KNOWING
The allowance
and the reporting line.
One number for tax, one for when online platforms
share your sales data with HMRC.
£1,000
Tax-free trading income each tax year
Gross income, before expenses. Above it, you can deduct the £1,000 allowance instead of actual expenses, or claim expenses if they are higher.
ALLOWANCE · HMRC
30 sales
Sales that trigger a platform report
Or roughly £1,700 (€2,000) a year. Since 2024, platforms must share these sellers' data with HMRC, but it is not a new tax.
PLATFORM REPORTING · HMRC
HMRC-commissioned research published in 2023 suggested 1 in 10 people in the UK operate in the hidden economy, many of them side hustlers unaware they should register.
FOUR STEPS FOR HOBBY SELLERS
Know your numbers,
keep it simple.
These steps follow HMRC's guidance on side income.
Step 1
Separate clear-outs from trading
Selling your own unwanted things is different from making or buying items to sell for profit.
Step 2
Add up all your side income
The £1,000 allowance covers all trading activities combined, before expenses, across the tax year.
Step 3
Keep records
Even if you stay under £1,000 and use full relief, HMRC says you must keep records of the income.
Step 4
Use the free checker
If unsure, HMRC's online checking tool says whether you need to tell it about extra income.
ABOVE £1,000
Allowance or
expenses, your choice.
If your gross trading income is over £1,000, you can deduct the £1,000 allowance instead of your actual expenses, known as partial relief. If your expenses are higher than £1,000, claiming them may work out better.
The allowance does not apply to trading income from a partnership, or to income from a company or employer connected to you. The Low Incomes Tax Reform Group notes that platform reports simply make it easier for HMRC to spot unpaid tax.
Questions
Questions on the way
Do I pay tax on selling my old things online?
Usually not. HMRC says if you are not trading and just occasionally sell unwanted items online, there is no tax due, and there is no new tax for online selling.
What is the trading allowance?
A tax exemption of up to £1,000 a year for individuals with trading income, such as self-employment, casual services like gardening, or hiring out personal equipment.
Is the £1,000 per hobby or in total?
In total. HMRC says the threshold applies to all trading activities combined, so £600 of craft sales and £500 from content creation would need registering.
My selling app says it reported me to HMRC. Do I owe tax?
Not automatically. Platforms must report sellers with 30 or more sales or about £1,700 a year, but HMRC says sharing data does not mean you must complete a tax return.
What counts as trading?
HMRC points to buying goods for resale, making goods to sell for profit, and offering paid services through a platform, such as delivery driving or letting a holiday home.
Destination
Where the facts come from
- HMRC (GOV.UK): Tax-free allowances on property and trading income
- HMRC (GOV.UK): Christmas crafters urged to check tax rules (2025)
- HMRC (GOV.UK): Information for online sellers (2024)
- Low Incomes Tax Reform Group: HMRC 'couldn't be clearer' there is no new side hustle tax
Updated