Have you ever made a little extra cash on the side?
Maybe it’s selling handmade crafts on Etsy. Or have a store on Vinted.
Do you make money from selling products online or get paid for advertising clicks?
Perhaps you rent out your spare room on Airbnb.
Or share content that earns you ad revenue on TikTok or YouTube.
It feels like harmless extra income.
But HMRC sees it differently.
The side hustle economy has grown quickly over recent years, thanks to the popularity of social media platforms and online marketplaces. People are using their knowledge, skills and entrepreneurial flair to generate extra cash, but may not realise this income needs to be declared to HMRC.
New Tax Crackdown for Online Sellers
Since January 2025, online marketplaces like Airbnb, eBay, Vinted, Etsy and Amazon are legally required to share income data with HMRC. This is to identify individuals who are trading online without declaring their income.
This doesn’t apply to people selling their personal, unwanted items. But if you’re regularly making and selling items for a profit it does!
The £1,000 Trading and Property Allowance
You can earn up to £1,000 per tax year (6 April to 5 April) before needing to notify HMRC, this is known as the Trading Allowance.
There is also a separate £1,000 property allowance if you rent out your home, garage or driveway on Airbnb.
If your trade and property income generated from your side hustles are over these allowances, then you need to declare your income to HMRC and pay tax on the profits.
What’s classed as income?
If you’re getting paid for:
- Brand deals or sponsored content
- YouTube ads or TikTok creator content
- Sales and referral commission
- Renting your home, garage or drive
- Selling on Etsy, Vinted, eBay or Amazon
Then this is taxable income
What expenses can you claim?
There are allowable business expenses you can deduct from your income to reduce your profit. These might include:
- Camera equipment and editing software
- Website or app subscriptions
- Postage and packaging costs
- Airbnb cleaning and hosting fees
- A proportion of business telephone and internet
- Online commission
The expenses you can claim depends on your business. It’s important to keep track of income and expenses and keep receipts as supporting evidence for HMRC.
HMRC’s ‘One to Many’ Letters
In Spring 2025, HMRC started sending letters as part of their campaign to uncover online sellers making money on the side.
The letters sent to individuals are based on sales data shared by online platforms in 2024 or earlier, including Airbnb, Etsy, Vinted, eBay and TikTok.
The letter says:
“We have information that shows you’ve earned income from online marketplace sales up to the tax year ending 5 April 2023. You need to tell us about this income. This is because you may owe tax.”
If you’ve received this type of income, HMRC may already know and be writing to you. We recommend seeking advice and making a voluntary disclosure before a letter drops through your letterbox.
Failure to declare taxable income can result in fines, penalties and interest.
Important deadlines
Individuals have until:
- 5th October 2025 to register as self-employed
- 31st January 2026 to file a Self-Assessment tax return and pay any tax to HMRC for the 5th April 2025 tax year.
Here to Help
If you need advice on this topic, how to register for self-assessment and declare your income to HMRC please get in touch, we’re here to help.
