If you earn fees or sell goods as a side hustle, you may need to pay tax on your profits.

HMRC has launched a new press release encouraging Christmas crafters and anyone with a fee earning hobby to check their tax reporting obligations as part of its Help for Hustles campaign. This is relevant to individuals earning extra income, whether from crafting Christmas decorations, selling festive items at market stalls, or upcycling furniture for seasonal sales. Those earning more than £1,000 in total from these activities may need to report their earnings to HMRC.

To help these side hustlers navigate their tax obligations, HMRC has introduced an online checker tool that helps individuals determine whether or not they need to declare additional income.

There are two £1,000 tax allowances available for small amounts of miscellaneous income: one for trading income and one for property income. Taxpayers who have both types of income can claim £1,000 for each.

• Trading Allowance: If a taxpayer makes up to £1,000 from self-employment (e.g., craft sales or content creation), this income is tax-free and doesn’t need to be declared. However, the £1,000 threshold applies to all combined trading activities. For example, if someone earns £600 from craft sales and £500 from content creation, their total trading income exceeds £1,000 and must be reported to HMRC.
• Property Allowance: If a taxpayer earns £1,000 or less from property-related activities (e.g., renting out a driveway), they don’t need to report this income to HMRC or include it in their tax return.

These allowances cover all relevant income before expenses. If a taxpayer's income is under £1,000, it’s tax-free. If they earn more than £1,000, they can either deduct the £1,000 allowance from their income or list their actual expenses when calculating taxable profit.

However, if side hustle income exceeds £1,000 in a tax year, taxpayers may need to complete a Self-Assessment tax return. This also includes income from cryptoassets. Importantly, this requirement applies only to active trading or selling services. If someone is just clearing out old items, there is usually no need to worry about tax.

For the 2024-25 tax year, the deadline to submit a tax return online and pay any tax owed is 31 January 2026.