Do I need to tell HMRC about my side income?
Selling online, freelancing, renting out a room or a driveway? Check if you're under the £1,000 tax-free allowance, or if you need to register for Self Assessment, and by when.
Check your side income
The short answer
- The first £1,000 a year from selling or freelancing is tax-free, and there's a separate £1,000 for property income.
- It's based on total income before costs, not profit.
- Over £1,000 from selling or freelancing? Register for Self Assessment by 5 October after the tax year ends.
A rise in the reporting limit to £3,000 has been announced, but it isn't law yet and doesn't apply to 2026/27.
General information based on GOV.UK guidance checked on 11 October 2026. Not tax advice. If you have other untaxed income or your situation is unusual, check with GOV.UK's tax return checker or an accountant.
How the £1,000 allowances work
There are two separate allowances, each worth up to £1,000 a tax year:
- Trading allowance: for money from selling things you make or buy to sell, freelancing, odd jobs and other small self-employed work.
- Property allowance: for money from renting out property or land, like a driveway, a garage or a holiday let.
If your total income from one of these is £1,000 or less, you don't need to tell HMRC or pay tax on it, though you should keep records. It's your gross income, meaning everything you took in before costs.
If you're over £1,000
You can still use the allowance. Instead of deducting your actual costs, you take £1,000 off your income and pay tax on the rest. That's worth it when your costs are under £1,000. If your costs are bigger, claim them instead. You can't do both.
Example: you earn £2,400 from tutoring with £150 of costs. Using the allowance, you're taxed on £1,400 instead of £2,250.
| Gross income | Selling or freelancing | Property |
|---|---|---|
| £1,000 or less | Nothing to tell HMRC | Nothing to tell HMRC |
| £1,001 to £2,500 | Register for Self Assessment | Contact HMRC |
| Over £2,500 | Register for Self Assessment | Register for Self Assessment |
Who can't use the allowances
- Income from your employer, or your spouse's or civil partner's employer
- Income from a company you, or someone connected to you, owns or controls
- Income from a partnership you, or someone connected to you, is a partner in
Frequently asked questions
Do I pay tax if I sell on Vinted or eBay?
Not if you're selling your own unwanted things, like old clothes. That isn't trading. If you buy things to resell, or make things to sell, that's trading income, and the £1,000 allowance applies.
Is the £1,000 based on profit or what I take in?
What you take in: your total income before costs. Someone who sells £1,300 of crafts with £500 of material costs is over the £1,000 limit, even though their profit is £800.
When do I have to register for Self Assessment?
By 5 October after the end of the tax year you went over. For the 2026/27 tax year (6 April 2026 to 5 April 2027), that's 5 October 2027, with the online return due by 31 January 2028.
Is the £1,000 limit going up to £3,000?
The government has announced plans to raise the point at which you need to report trading income to £3,000, expected from 2027/28. It isn't law yet, so the £1,000 rules still apply for now. The £1,000 tax-free allowance itself isn't changing.
Do platforms report my sales to HMRC?
Yes. Under the digital platform reporting rules, sites like eBay, Etsy, Vinted and Airbnb share some sellers' details and earnings with HMRC. That's another reason to check whether you need to declare your income.
I'm employed too. Does that change anything?
Your wages don't count towards the £1,000 allowances. But if you go over £1,000 from side income, the tax you pay on it is based on your total income, so it could be taxed at 40% if your salary already puts you in the higher rate band.
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