An announcement which has slipped under the radar will see side hustlers be able to sell more tax-free.
HMRC is tripling a key tax free allowance (Image: Getty)
HMRC will hand UK households a massive increase to a key tax-free allowance which will allow them to earn up to £3,000 a year tax-free, tripled from the current £1,000 limit.
Announced in the Budget documents today, the government confirmed: “The government will increase the Trading Allowance from £1,000 to £3,000, allowing individuals to receive up to £3,000 of trading and miscellaneous income tax-free each year. This will be introduced through Finance Bill 2026-27 and will take effect from 6 April 2027.”
HMRC says about Trading Allowance: “You can get up to £1,000 each tax year [which is now being boosted to £3,000] in tax-free allowances for property or trading income from 6 April 2017. If you have both types of income, you’ll get a £1,000 allowance for each.
“If your annual gross property income is £1,000 or less, from one or more property businesses you will not have to tell HMRC or declare this income on a tax return. You may be required to complete a tax return for other income.
“If your annual gross trading income is £1,000 or less, from one or more trades you may not have to tell HMRC, however there are circumstances when you must register for Self Assessment and declare your income on a tax return.”
“If your annual gross trading or property income, from one or more trades or businesses is more than £1,000 you can use the tax-free allowances, instead of deducting any expenses or other allowances.
“If you use the allowances you can deduct up to £1,000, but not more than the amount of your income. This is known as ‘partial relief’.
“If your expenses are more than your income it may be beneficial to claim expenses instead of the allowances.
“Gross income means the total amount you would put on your tax return before any allowances or expenses are taken off. This applies whether you use the cash basis or traditional accounting.
“There may be circumstances where you choose to complete a tax return even if your income is £1,000 or less.”