If you’re thinking of selling online to bring in a little extra money, there’s a change to the UK trading allowance on the way.
The Government plans to increase the amount you can earn without paying tax, from £1,000 to £3,000. This change is due to come into effect from 6th April 2027 and could make it simpler for people with income pressures to start a side hustle.
Could Selling on Vinted or eBay Help Me?
A clear-out of unwanted clothes, toys or household items could put some welcome cash into your pocket.
But it’s important to note that selling personal belongings is usually classed differently than trading. According to HMRC, you probably won’t have to pay Income Tax on those sales, although Capital Gains Tax may apply to any item that earns £6,000 or more.
Be aware that the new allowance isn’t a blanket tax-free limit for everything you sell online.
You may be seen as ‘trading’ if you regularly buy or make things with the intention of selling them for a profit. That could include reselling clothes, crafting items or upcycling furniture as a side hustle.
If you’re considering trying one out, remember to keep simple records of what you sell and the money you receive.
What Will the £3,000 UK Trading Allowance Mean?
The UK trading allowance increase has been timed to come into effect at the start of the 2027-28 tax year.
That extra £2,000 applies to the total amount of your eligible trading and miscellaneous income – not for each separate side hustle or selling account.
But the allowance shouldn’t be seen as a guarantee that anyone can earn £3,000 from selling online and never pay tax. Tax rules depend on:
- What you’re selling
- Whether you’re trading
- Your personal circumstances
If you’re unsure about what applies and where, use HMRC’s online tool to check whether you need to tell them about your income.
Side Hustles: A Small Boost, Not a Complete Solution
Before starting a side hustle, be sure to check:
- Postage and packaging costs
- Platform fees and commissions
- Length and regularity of payment terms
- How much sellers are charging for similar items
Relying solely on the proceeds of online selling can be risky, as there’s no guarantee of regular profits.
That’s why a side hustle should be treated as just that – something you earn ‘aside from’ your primary type of household income.
And if it does grow successfully enough to become your main source of funds, remember that different tax rules will apply.
Be Side Hustle Savvy
The move to a £3,000 trading allowance is planned for next April, so if you start a trading side hustle before then, make sure you check the current HMRC rules.
Don’t assume a sale of personal belongings is the same as buying or making goods to sell for profit.
A little preparation can help you make the most of any extra income without an unwelcome tax surprise – contact us for any budgeting advice.
