Side Hustle Tax UK: The £1,000 Trading Allowance
eBay and Vinted now report your sales straight to HMRC. There is a £1,000 line and a date in October most sellers have never heard of. Miss it and your first letter is a penalty.
Side hustle marginal rate by total income, 2026/27
| Income band | Income tax | Class 4 NI | Combined |
|---|---|---|---|
| £12,571-£50,270 | 20% | 6% | 26% |
| £50,271-£100,000 | 40% | 2% | 42% |
| £100,001-£125,140 | 60% | 2% | 62% |
| Above £125,140 | 45% | 2% | 47% |
Side hustle profit stacks on top of your day-job income and is taxed at your marginal rate.
Key takeaways
The £1,000 trading allowance lets you earn £1,000 of casual self-employment income tax-free per year - no registration, no Self Assessment
Above £1,000 of trading income you must register with HMRC by 5 October following the tax year of first earnings
You can deduct the £1,000 allowance OR your actual expenses, whichever produces a lower taxable profit - not both
Side income is taxed at your marginal rate on top of your day job, so a higher-rate earner with side income loses 40% plus 2-9% NI to HMRC