UK side-hustle tax-free allowance to rise to £3,000 next year
Summary
The UK will raise its tax-free trading allowance for side-hustle income from £1,000 to £3,000 a year in April 2027. The government estimates that up to 1.4 million people could benefit, including some who will pay less tax or no longer need to report their trading income to HMRC.Key Facts
- The allowance will increase from £1,000 to £3,000 in April 2027.
- The change was announced in the budget by the chancellor.
- The government estimates that up to 1.4 million people could benefit.
- About 400,000 people are expected to see their tax bill fall, with an average saving of £380.
- About 100,000 people are expected to no longer need to report their trading income to HMRC.
- People earning more than £3,000 can choose whether to use the allowance or deduct eligible business expenses and capital costs when calculating taxable profit.
- Selling personal belongings for less than their original purchase price is not taxable because the seller has not made a profit.
- Online platforms must report seller information to HMRC when a seller makes 30 sales or earns €2,000, about £1,700, in a year.
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