A major tax change announced by Prime Minister Andy Burnham will let UK earners keep more of their side hustle income from April 2027. The tax-free threshold for casual earnings is set to rise from £1,000 to £3,000 a year, meaning around 400,000 people could save an average of £380 on their tax bill.
What the change means for side hustlers
Speaking in an Instagram video, Burnham said: "Maybe you're a keen Vinted seller, maybe you do some dog walking or pet sitting. Maybe you're a teacher doing some extra tutoring." He explained that up to now, anyone earning more than £1,000 a year from such activities has had to start paying tax on it. "But I think if you're putting in the extra hours, more of that money should stay with you."
Burnham confirmed: "We've tripled the amount you can earn from a side hustle without paying a single penny of tax on it. From April next year, you'll be able to earn up to £3,000 tax-free and without having to report it to HMRC." He added that the move is meant to "make it easier to earn a bit extra" or "give that business idea a go".
Current rules remain until April 2027
The new limits do not come into force until the current tax year ends in April 2027. Until then, the existing rules still apply, and ignoring them could lead to penalties. The GOV.UK website warns: "If we find that you needed to pay tax on your income, but you didn't tell us about it, you may be given a penalty. HMRC also charges interest on any late payment of tax, so the longer you put off paying, the more you may owe. You might also get penalties if you don't pay your tax on time."
As of November 2026, a casual hobby becomes a taxable side hustle if it makes more than £1,000. The UK Government said: "Whether you get cash in hand or money paid straight to your bank account, you'll need to tell HMRC so you can avoid any tax surprises." Those simply selling unwanted personal belongings from time to time probably do not need to tell HMRC, but it is advisable to check using the free GOV.UK tool to see if tax is owed on earnings.
