HMRC already knows about your side hustle: platform reporting, the £1,000 allowance, and what to do next

Every January now, the big digital platforms — eBay, Vinted, Etsy, Depop, Airbnb, Uber, Deliveroo, TaskRabbit and dozens more — send HMRC a report of what their UK sellers earned. The rules came from the OECD, landed in 2024, and the data is now flowing on schedule. HMRC's "nudge letters" matching platform data to tax records are no longer a warning about the future; clients bring them into our office most weeks.

So here is the calm, accurate version of what it means.

Selling your own stuff is not taxable

Clearing the loft onto Vinted or eBay is not trading, and no volume of platform reporting changes that. Selling personal possessions for less than you paid is simply not taxable income (rare exceptions exist for single items sold above £6,000, where capital gains tax can apply).

The platforms report your activity above a de minimis level regardless — roughly 30 sales or €2,000 in a year — so a report existing does not mean tax is owed. It means HMRC can see the numbers. Those are very different things.

When it becomes trading

The line is intent and pattern: buying to resell, making things to sell, providing a service, driving, delivering, letting a room or a property. The old "badges of trade" do the work here, and honestly, most people know which side they are on.

If you are trading:

• The £1,000 trading allowance covers you completely if gross trading income is under £1,000 — nothing to register, nothing to file.
• Above £1,000, you register for self assessment and report it. You then choose each year between deducting the flat £1,000 allowance or your actual expenses — whichever is larger. Sellers with real costs (stock, postage, materials, mileage) usually beat the allowance easily.
• Property income has its own separate £1,000 allowance, and Rent a Room relief covers up to £7,500 for lodgers in your own home.

If you have a backlog

Some people reading this have been trading for two or three years without registering, and the platform data now reaches back. The answer is unglamorous but reliable: come forward before HMRC comes to you. A voluntary disclosure — done properly, with reasonable expense claims and the allowances used — consistently ends in modest settlements and minimal penalties. Ignored nudge letters end otherwise. We have handled both kinds; be the first kind.

If the side hustle is becoming a business

A growing side income eventually collides with two other regimes worth knowing about now:

• Making Tax Digital: once combined self-employment and property income passes £30,000 in April 2027 (£20,000 in 2028), quarterly digital reporting applies. Plenty of "side" hustles are already past these lines.
• VAT: cross £90,000 of taxable turnover on a rolling 12-month basis and registration is mandatory — the rolling test catches people who only ever check calendar years.

None of this is a reason to stay small; it is a reason to keep records from the start. A bank account for the venture and a £10-a-month software subscription make every one of these thresholds a non-event.

The one-paragraph action plan

Under £1,000 gross and just decluttering? Do nothing, keep enjoying it. Trading above £1,000? Register, keep digital records, claim your real costs. Behind on any of that? Disclose voluntarily, this year, with help. HMRC's data is not going away — but handled early, it has never been easier to be compliant for a few pounds a week.

Got a nudge letter, or not sure which side of the line you are on? Send an enquiry from this page — the first conversation is free and usually settles it in ten minutes.