• Christmas market stalls

• Handmade goods or crafts

• Online selling

• Tutoring, dog walking, or delivery services

• Influencer and content creation activities

If your income exceeds £1,000 in a tax year, HMRC side hustle tax rules require you to notify HM Revenue & Customs.

Online Selling and HMRC Side Hustle Tax Rules in 2025/26

From 2024 onwards, and fully embedded for 2025/26, digital platforms must share seller data with HMRC under international reporting standards (often referred to as DAC7).

Platforms such as eBay, Etsy, Amazon, Airbnb and Deliveroo must report sellers who:

• Complete 30 or more transactions in a year, or

• Earn more than €2,000 (approximately £1,700) in gross sales

Under HMRC side hustle tax rules, reported information includes:

• Name and address

• Date of birth

• National Insurance number

• Number of transactions

• Gross proceeds

Crucially, this is not a new tax, but it significantly increases HMRC’s visibility of side hustles.

Badges of Trade Under HMRC Side Hustle Tax Rules

Whether an activity counts as a taxable trade depends on the “badges of trade”. HMRC side hustle tax rules do not require all badges to be present — just one may be sufficient.

The nine badges include:

• Profit-seeking motive

• Frequency of transactions

• Nature of the asset sold

• Similar past transactions

• Modification of goods before sale

• Method of sale

• Source of finance

• Time between purchase and resale

• Method of acquisition

Seasonal sellers often trigger badges unintentionally, particularly where items are made or purchased specifically for resale.

Trading Allowance and HMRC Side Hustle Tax Rules Explained

For the 2025/26 tax year, the £1,000 trading allowance remains unchanged.

Under HMRC side hustle tax rules:

• If gross trading income is £1,000 or less, it does not need to be reported

• If income exceeds £1,000, tax and NICs may apply

You can either:

• Deduct the £1,000 trading allowance, or

• Deduct actual allowable expenses

If expenses exceed income and create a loss, it may be beneficial not to claim the allowance, as losses can sometimes be offset against other income.

Influencers, Gifts and HMRC Side Hustle Tax Rules

Influencers and content creators are firmly within HMRC’s focus.

Under HMRC side hustle tax rules, non-cash benefits — such as free products, services, or experiences received in exchange for promotion — are taxable.

These benefits must be:

• Valued at their market value

• Declared as trading income, alongside any cash payments

Many influencers fall into compliance issues simply by not realising that “free” items are still taxable.

How Trueman Brown Can Help You Navigate HMRC Side Hustle Tax Rules

Understanding HMRC side hustle tax rules can be complex — particularly where activities blur the line between hobby and business.

Trueman Brown can help you:

• Determine whether your activity counts as a trade

• Register with HMRC correctly

• Choose between the trading allowance or expense deduction

• Deal with HMRC enquiries or letters

• Ensure full compliance while minimising tax exposure

📧 Email: mark@truemanbrown.co.uk
📞 Phone: 01708 397262

Early advice can prevent penalties, interest, and unnecessary stress.

FAQ: HMRC Side Hustle Tax Rules

Do I need to pay tax on a Christmas side hustle?

Yes, if you earn more than £1,000 and meet HMRC side hustle tax rules for trading.

Does selling personal belongings count?

Usually no — provided items were bought for personal use and not for resale at a profit.

Will HMRC know about my online sales?

Yes. Platforms now report seller data directly to HMRC under HMRC side hustle tax rules.

Are gifts from brands taxable?

Yes. Non-cash benefits received in exchange for promotion must be declared as income.

Has anything changed for 2025/26?

While tax rates and allowances remain broadly the same, data sharing and compliance checks are now fully operational, increasing HMRC scrutiny of side hustles.