Side income: when you need to tell HMRC, and the new £3,000 allowance
Selling online, a weekend business, renting a driveway: small earnings can be tax-free, up to a limit. The limit triples in April 2027, and online platforms now report sellers to HMRC.
The trading allowance lets you earn a small amount from self-employment or occasional work without paying tax or telling HMRC. Today it is £1,000 a year of gross income. Budget 2026 raises it to £3,000 from 6 April 2027, covering trading and miscellaneous income.
Show the data
| Until 5 April 2027 | £1,000 |
|---|---|
| From 6 April 2027 | £3,000 |
Gross, not profit
The allowance applies to income before costs. If you earn more than the allowance, you can choose to deduct it instead of your actual expenses, which helps when costs are low. If your costs are higher, claiming them is usually better.
Platforms report to HMRC
Online marketplaces and apps that pay sellers must collect sellers’ details and report them to HMRC, under rules that took effect in 2024. Selling your own unwanted things is not trading, but buying to resell, or making things to sell, usually is. HMRC can see the figures, so it pays to know which side of the line you are on.
Over the allowance?
If your side income goes over the allowance, register for Self Assessment by 5 October after the end of the tax year. Keep records from the start: once your self-employment and property income before expenses passes £20,000 a year, Making Tax Digital will apply, from April 2028 at the earliest.
This insight is general information, not advice for your circumstances. Talk to us before acting on it.