Do you boost your pension or wages by earning a bit on the side? Nowadays it’s called a side hustle – using your skills and/or energy to make a spot of extra money, perhaps to help with those April bills or save up for a holiday.

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You might do bookkeeping, take in laundry, make pots or paint pictures to sell, walk dogs, or buy and sell things online through platforms like eBay, Vinted or Etsy. But beware – it’s not just customers who will be looking at your social media. The taxman will as well.

Very small side hustles are covered by what is called the trading allowance, currently £1,000. If your takings are £1,000 or less in the tax year (6 April to the next 5 April) then you need not tell HM Revenue & Customs or pay tax. Remember, this is not the profit you are allowed; it is the amount of your takings or turnover.

If you take more than that, then you have a duty to tell HMRC – do it by 5 October in the tax year after your business started. So if you started on 6 April this year, you do not have to tell HMRC until 5 October 2026. At the moment, that means you will be sent a self-assessment tax return, which you must complete.

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Although the Government recently announced an increase in that reporting threshold to £3,000, no date for the change has been fixed. Confusingly, tax will still be due on the profits you make on takings between £1,000 and £3,000, but you will pay it through what HMRC says will be a simpler online process. Details are awaited.

Tax is only due if you are trading – buying or making things to sell, or selling services. There is no tax on selling things you bought for your own use – when you clear out the wardrobe or attic, for example.

However, online sites that host these sales now have to tell HMRC if you sell 30 or more items in a calendar year, or your takings are more than €2,000 (currently about £1,665). That means you might get a letter from HMRC when you owe nothing. So it’s important to be clear about your rights!

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