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HMRC issues £1,000 tax warning to side hustlers 

ended 25. June 2025

HMRC has today issued a warning to side hustlers to check if they need to complete a Self Assessment tax return for the 2024 to 2025 tax year. One accountancy firm urged people to not assume their side hustle is exempt, but one business owner said there are surely “bigger fish to fry”.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: "Whether you are selling handmade crafts online, creating digital content, or renting out property, understanding your tax obligations is essential. If you earn more than £1,000 from these activities, you may need to complete a Self Assessment tax return.

"Filing early puts you in control – you will know exactly what you owe, can plan your payments, and avoid the stress of the January rush. You don’t need to pay immediately when you file – you have until 31 January to settle your tax bill.

Lauren Wright of chartered accountants, Ridgefield Consulting, said people should not assume their side hustle is exempt: “Our firm often advises people who haven't realised their side income needed declaring. Many assume occasional selling or freelance work isn’t taxable, but once income becomes regular or exceeds £1,000, a Self Assessment return is required.

"With 43% of UK adults running side hustles and new HMRC reporting rules from 2025, more people risk unexpected tax bills. This is not a new tax, simply greater enforcement, especially for younger earners on platforms like Etsy or Airbnb. The key is to register early, track income and expenses, and don’t assume your hustle is exempt. If unsure, seek professional advice.”

Scott Gallacher, Director at wealth manager, Rowley Turton, said people are often unaware of the rules: “With platforms like eBay, Etsy, and Shopify, side hustles are more popular than ever. But many don’t realise that earning over £1,000 in a tax year may mean needing to register for Self Assessment. In my experience, it’s rarely deliberate tax evasion — more often just a lack of awareness.

"But I have noticed fewer familiar sellers recently — people I’ve bought from in the past — possibly due to HMRC’s increased focus on this area. My tips for people with side hustles include keeping records, however small the income, setting aside 20%–30% for tax and National Insurance, not ignoring HMRC letters and speaking to an accountant early if unsure.”

But Rob Peters, Principal at Simple Fast Mortgage, was unimpressed: "HMRC are pointing the finger at small-scale side hustlers while letting mega corporations navigate tax loopholes with ease. Most people making a few hundred quid on Vinted or baking cakes aren’t trying to dodge tax, they’re just trying to survive.

"Instead of sending out warnings, why not simplify the rules or raise the trading allowance so we’re not treating casual sellers like full-scale businesses."

Rachel Hayward, MD at Ask the Chameleon, also suggested HMRC should have other priorities: "Surely to goodness there are other bigger fish to fry? Why are we stifling entrepreneurship at its very beginning, tying people up in red tape before they truly find their feet and enjoy the rollercoaster that awaits them?

“There are HUGE corporations who are skillfully manipulating the system (or just boldly getting away with it) and late payers who need sorting out first. But no, let's choose the smaller people, as they are an easy target.”

Michelle Lawson, Director at Lawson Financial, shared much the same view: “Focus on the right things rather than the wrong things here. People simply selling their belongings can quite easily get caught in this ridiculous wrangle. Also, bear in mind, little financial education is taught in schools. More education built in of what is acceptable and how business and tax works earlier on may also encourage entrepreneurship at the roots.”

Kundan Bhaduri, Entrepreneur at The Kushman Group, was withering:

“Well, isn't it splendid that while Rome proverbially burns, HMRC's legions are being dispatched to hunt down anyone daring to earn a few extra quid selling knitted tea cosies online. HMRC's stern warning that those earning over a £1000 from handmade crafts or digital content might need to wrestle with a Self Assessment tax return is truly the stuff of economic legend. While the nation faces genuine fiscal challenges, and businesses scream for sensible policy, this focus on micro earnings feels like rearranging deckchairs.”

The deadline to submit a Self Assessment tax return online and pay any tax owed for the 2024 to 2025 tax year is 31 January 2026.

7 responses from the Newspage community

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Rob Peters
Principal at Simple Fast Mortgage
HMRC are pointing the finger at small-scale side hustlers while letting mega corporations navigate tax loopholes with ease. Most people making a few hundred quid on Vinted or baking cakes aren’t trying to dodge tax, they’re just trying to survive. Instead of sending out warnings, why not simplify the rules or raise the trading allowance so we’re not treating casual sellers like full-scale businesses.
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Editor
Scott Gallacher
Director at Rowley Turton
With platforms like eBay, Etsy, and Shopify, side hustles are more popular than ever. But many don’t realise that earning over £1,000 in a tax year may mean needing to register for Self Assessment. In my experience, it’s rarely deliberate tax evasion — more often just a lack of awareness. But I have noticed fewer familiar sellers recently — people I’ve bought from in the past — possibly due to HMRC’s increased focus on this area. My tips for people with side hustles include keeping records, however small the income, setting aside 20%–30% for tax and National Insurance, not ignoring HMRC letters and speaking to an accountant early if unsure.
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Editor
Tony Redondo
Founder at Cosmos Currency Exchange
This is a big issue. 732,498 filed last-minute tax returns in 2023-2024, and 10% of UK individuals may be non-compliant. Many side hustlers, especially those new to self-employment, overlook the need to register for Self-Assessment or file a tax return because they do not realize their income is taxable if it exceeds the £1,000 Trading Allowance. The tax system can feel overwhelming, especially for those juggling a side hustle alongside a full-time job. HMRC’s new data-sharing rules with platforms like eBay, Airbnb, and others mean income is now automatically reported, increasing the risk of penalties for non-compliance. Tips include registering by 5 October to use HMRC’s checker tool, keeping accurate records, filing early, being aware of scams, and considering using the professional services of an accountant. For complex cases, consult a tax adviser.
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Michelle Lawson
Director at Lawson Financial
Focus on the right things rather than the wrong things here. People simply selling their belongings can quite easily get caught in this ridiculous wrangle. This is quite clear to define in my view, if someone is buying and selling items above the 'norm', which can't be misconstrued as a one off 'clear out', then it is a business and the appropriate tax should be paid and records kept. It is a grey area and the system appears to set people up to fail with its lack of clarity, lack of education and overall complexity. Also, bear in mind, little financial education is taught in schools. More education built in of what is acceptable and how business and tax works earlier on may also encourage entrepreneurship at the roots.
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Kundan Bhaduri
Entrepreneur, Investor and Landlord at The Kushman Group
Well, isn't it splendid that while Rome proverbially burns, HMRC's legions are being dispatched to hunt down anyone daring to earn a few extra quid selling knitted tea cosies online. HMRC's stern warning that those earning over a £1000 from handmade crafts or digital content might need to wrestle with a Self Assessment tax return is truly the stuff of economic legend. A Thousand pounds. In an era where the price of a pint makes your eyes water and energy bills induce palpitations, this is the grand treasury target. While the nation faces genuine fiscal challenges, and businesses scream for sensible policy, this focus on micro earnings feels like rearranging deckchairs. As a landlord navigating a minefield of regulations, I can assure you there are far bigger financial fish swimming in less regulated ponds. This is not about ensuring everyone pays their fair share. It is about distracting from the real economic issues. Pure political theatre, dressed up as prudent tax collection. Bravo.
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Rachel Hayward
MD at Ask the Chameleon
Surely to goodness there are other bigger fish to fry? Why are we stifling entrepreneurship at its very beginning, tying people up in red tape before they truly find their feet and enjoy the rollercoaster that awaits them? There are HUGE corporations who are skillfully manipulating the system (or just boldly getting away with it) and late payers who need sorting out first...but no, let's choose the smaller people, as they are an easy target.
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Lauren Wright
Spokesperson at Ridgefield Consulting
Our firm often advises people who haven't realised their side income needed declaring. Many assume occasional selling or freelance work isn’t taxable, but once income becomes regular or exceeds £1,000, a Self Assessment return is required. With 43% of UK adults running side hustles and new HMRC reporting rules from 2025, more people risk unexpected tax bills. This is not a new tax, simply greater enforcement, especially for younger earners on platforms like Etsy or Airbnb. The key is to register early, track income and expenses, and don’t assume your hustle is exempt. If unsure, seek professional advice.