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Do I need to tell HMRC about my side hustle? (2026/27)

Updated 3 November 2026. General information, not tax advice. Written with AI assistance and checked against GOV.UK.

Selling crafts on Etsy, reselling trainers, dog-walking at weekends or freelancing in the evenings: lots of people in the UK earn a bit on the side, and they all end up asking the same thing. Do I need to tell HMRC?

The short answer from GOV.UK: if your gross trading income is more than £1,000 in a tax year, you must register for Self Assessment. Here's what that means for the 2026/27 tax year (6 April 2026 to 5 April 2027).

Step 1: Is it actually trading?

Not every pound you make online is taxable. GOV.UK says you're unlikely to pay tax if you sell personal items from your home, such as the contents of a loft or garage. Clearing out your wardrobe isn't usually a business.

If you buy or make goods to sell at a profit, you're likely to be trading and will pay tax on the profits. The same goes for services such as freelancing, babysitting, gardening or tutoring.

Step 2: Is your gross income over £1,000?

The trading allowance lets you earn up to £1,000 a tax year from self-employment, casual services or hiring out personal equipment without paying tax on it.

It's based on gross income, meaning what customers paid you before costs. If you sold £1,400 of candles and spent £600 on wax and jars, your gross income is £1,400, not £800.

The allowance is due to rise to £3,000 from April 2027 (the 2027/28 tax year), subject to the Finance Bill. It's still £1,000 for 2026/27. Our guide on the trading allowance rising to £3,000 has the details.

Step 3: Register by the deadline

For income earned in 2026/27:

WhatDeadline
Register for Self Assessment (first time, or if you didn't need to file last year)5 October 2027
Paper tax return31 October 2027
Online tax return31 January 2028
Pay the tax you owe31 January 2028

If you tell HMRC after the registration deadline, you could get a penalty. If you went over £1,000 in 2025/26, the deadline to register for that year was 5 October 2026, so register now if you haven't.

Step 4: Check whether Making Tax Digital applies

Making Tax Digital (MTD) for Income Tax means keeping digital records and sending HMRC quarterly updates from compatible software. It applies to sole traders and landlords based on qualifying income, which is gross self-employment plus property income.

If qualifying income is overin tax yearyou need MTD from
£50,0002024/256 April 2026
£30,0002025/266 April 2027
£20,0002026/276 April 2028

Most side hustles are well below these levels, but it's worth knowing where the line is if you're growing.

Step 5: Roughly how much tax?

Your side-hustle profit is added to your other income, such as a salary. For 2026/27 in England, Wales and Northern Ireland:

Worked example (illustrative): you earn a £31,000 salary and your Etsy shop takes £6,400 with £2,150 of costs. Your costs beat the £1,000 allowance, so you claim actual expenses and your profit is £4,250. Your salary already uses your Personal Allowance, so the profit is taxed at 20%, about £850. Class 4 NI is £0 because the self-employed profit itself is under £12,570. That's roughly £71 a month to set aside.

Scottish Income Tax bands are different and aren't covered by these figures.

Step 6: Keep records

Whichever route you take, keep records of your income and costs: invoices, platform statements, bank statements, or a simple spreadsheet. Since January 2024 platforms like eBay, Vinted and Etsy report many sellers to HMRC, so your records should line up. Our guide to the Vinted and eBay reporting rules explains who gets reported.

Check your own numbers in two minutes

The free UK Side-Hustle Tax Quick Check is a one-page spreadsheet for Excel or Google Sheets. Enter your income, costs and salary and it tells you whether the trading allowance covers you, whether to register, whether MTD applies, and roughly how much to put aside, based on the 2026/27 rules.

If you want to track every sale, fee and expense through the year, the Side-Hustle & Online Seller Profit + Tax Tracker (£14) compares the allowance with your real expenses by UK tax year.

Sources (checked 3 November 2026)