HMRC issues tax warning over Christmas side hustles
Managing Christmas market stalls, creating social media content or selling items online can be a great way to boost your income as festive costs increase.
But this Christmas anyone who is seasonal self-employed is urged to ensure their taxes are in order.
Tax experts warn that those who fail to comply with HM Revenue and Customs (HMRC) rules on making money from side hustles could find themselves facing fines and penalties.
UK law says everyone has a trade allowance; This means you can earn up to £1,000 each tax year in addition to your main job, without paying tax. However, earnings above this are subject to tax, which will vary depending on how much you earn.
According to HMRC, anyone earning more than £1,000 from side gigs in the 2024-25 tax year (6 April 2024 – 5 April 2025) will need to register for self-assessment as a sole trader. You must then file a tax return and pay any taxes due by January 31, 2026.
All sales made this Christmas will fall into the 2025-26 tax year and must be declared and all taxes paid on them by the end of January 2027.
HMRC has launched a Help for Hustles campaign to help investors understand when tax rules apply to them.
It details the important distinctions in making money; It’s like the difference between selling unwanted personal items to declutter homes and selling items made for profit.
It provides a free, anonymous check-in for anyone unsure of where they stand, and provides specific guidance for content creators.
The tax office warned that the £1,000 allowance applies to all activities; so if you made £800 from selling crafts online and £400 from content creation, you’d still exceed your trading allowance and would need to pay tax.
He also noted that investors should be aware that this figure is before expenses and is not the same as profit.
.jpeg)
If you have no other income, you may not have to pay tax if you earn under £12,570 a year; because this is your non-taxable personal allowance.
You can also deduct some “allowable expenses” from your tax bill if they are costs related entirely to your side hustle. This could include things like office costs for stationery, and you can ask HMRC for advice if necessary.
“As your side business grows, unpaid taxes may come to light,” HMRC said. “If you haven’t told us about the extra money you’ve earned, this could lead to an unexpected and possibly huge tax bill.
“That’s why it’s really important to stay on top of your tax affairs. So make sure you pay your debt as soon as possible, and if you haven’t paid for previous tax years, contact us as soon as possible.”
