The trading allowance is rising to £3,000 from April 2027: what UK side hustlers need to know
Updated 29 October 2026. General information, not tax advice. Written with AI assistance and checked against GOV.UK.
Budget 2026 confirmed that the trading allowance will rise from £1,000 to £3,000 from 6 April 2027, the start of the 2027/28 tax year. The Self Assessment reporting threshold for trading income rises to £3,000 at the same time. If you sell on Etsy, eBay or Vinted, freelance, or do odd jobs on the side, this is the biggest change to small-scale side income since the allowance was introduced in 2017.
Nothing changes for this tax year. For 2026/27 (6 April 2026 to 5 April 2027) the allowance is still £1,000. If your gross trading income this year is over £1,000, you still need to register for Self Assessment by 5 October 2027.
What's changing
- The allowance itself: up to £3,000 a year of gross trading and miscellaneous income can be tax-free, up from £1,000.
- Reporting: HMRC says people with trading income at or below the allowance won't need to report that income through Self Assessment.
- Above the allowance: you can still choose to deduct the allowance (now £3,000) instead of your actual business expenses, whichever gives the lower profit.
- When: from 6 April 2027, for 2027/28 onwards. The change is being made in Finance Bill 2026-27, so it still has to pass through Parliament.
What isn't changing
- It's still measured on gross income, the total before any costs, not profit.
- It's still either the allowance or your actual expenses, never both.
- You should still keep records of what you earn, such as platform statements, invoices and bank statements.
- Under the current rules you can't use the allowance against income from a company or partnership you (or someone connected to you) controls or belongs to, or from your employer or your spouse's or civil partner's employer.
Worked examples: 2026/27 vs 2027/28
The same four side hustles, with the same figures in both years. "Taxable profit" is before your personal allowance and any other income.
| Side hustle | Gross income | Actual costs | 2026/27 (£1,000 allowance) | 2027/28 (£3,000 allowance) |
|---|---|---|---|---|
| A: weekend dog-walker | £800 | £50 | Covered in full | Covered in full |
| B: freelance proofreader | £3,000 | £200 | Must register; best option is the allowance, profit £2,000 | Covered in full, as gross is at the £3,000 limit |
| C: Etsy candle maker | £6,400 | £2,150 | Actual costs win: profit £4,250 (allowance would give £5,400) | Allowance now wins: profit £3,400 (costs would give £4,250) |
| D: eBay reseller | £9,000 | £6,500 | Actual costs win: profit £2,500 | Actual costs still win: profit £2,500 (allowance would give £6,000) |
The new rule of thumb: if your real costs are more than £3,000 a year, claim your costs; if they're less, the allowance will usually give the lower profit from 2027/28. Makers and service side hustles with modest costs gain most. Resellers with big stock bills are largely unaffected, which is why it still pays to track every cost.
What to do now
- Work out 2026/27 under the current £1,000 rules. If you're over £1,000 gross this year, plan to register by 5 October 2027.
- Keep tracking your costs. You'll need them to compare against the allowance in both years.
- Don't stop recording income just because you might fall under £3,000 next year. Platforms already report seller data to HMRC, and good records make it easy to show you're within the limit.
Check where you stand for 2026/27
The free UK Side-Hustle Tax Quick Check compares the £1,000 allowance with your actual costs, tells you whether you need to register, and gives a rough tax estimate. It's built on the current 2026/27 rules.
For year-round records, the Side-Hustle & Online Seller Profit + Tax Tracker (£14) logs every sale and expense in HMRC's categories with an allowance-vs-expenses comparison built in.
Sources (checked 29 October 2026)
- HMRC, Increasing the trading allowance (tax information and impact note, 28 October 2026)
- HM Treasury, Budget 2026: overview of tax legislation and rates, section 1.5
- GOV.UK, Tax-free allowances on property and trading income
- GOV.UK, Register for Self Assessment