HM Revenue and Customs (HMRC) has issued a stark warning to the UK's festive entrepreneurs, alerting them that their Christmas side earnings could result in an unexpected tax bill.
Understanding the £1,000 Threshold
The tax authority has launched a new "Help for Hustles" campaign to inform people that income generated from seasonal activities like crafting, running market stalls, or upcycling furniture for profit counts as taxable trading. Under current rules, anyone whose total self-employed income from all activities exceeds £1,000 per year must register with HMRC and complete a Self Assessment tax return.
This allowance is cumulative across all trading ventures. For example, if someone earns £600 from selling handmade Christmas decorations and an additional £500 from creating social media content, their combined income of £1,100 surpasses the threshold, requiring them to register.
Key Dates and Distinctions
The deadline for declaring income from the 2024–25 tax year is 31 January 2026. HMRC is urging people to check their obligations now to avoid a surprise demand for payment later.
The campaign clarifies a crucial difference: selling unwanted personal items typically isn't taxable, but creating or buying goods specifically to sell for a profit is considered trading. Kevin Hubbard, HMRC’s Director of Individuals & Small Business Compliance, stated: "Whether you’re making handmade Christmas decorations, selling upcycled furniture, or running a seasonal market stall, it’s important to understand when your festive side hustle becomes taxable trading. Nobody wants an unexpected tax bill, so anyone earning more than £1,000 from their side hustle should tell HMRC."
Increased Scrutiny on Online Sales
HMRC's research indicates that approximately one in ten people in the UK participate in the "hidden economy", often unaware their extra income is taxable. The tax office is also receiving more data, as online platforms like eBay, Vinted, and Etsy are now required to share information about sellers making 30 or more transactions annually or earning over approximately £1,700.
Graham Wilson OBE, Deputy Chief Executive of the National Association of British Market Authorities, echoed the sentiment, encouraging all traders, especially first-timers, to be clear about their tax obligations.
People uncertain about whether they need to declare income can use HMRC’s free online checker on GOV.UK. The "Help for Hustles" campaign also offers guidance on filing returns and setting up payment plans if needed.
