Side Hustle Tax Calculator UK 2025/26

Side hustle tax calculator UK 2025/26 — Etsy, eBay, Vinted, Uber, freelance. £1k trading allowance, when you must regist

Quick answer: You can earn £1,000/year tax-free from a side hustle (trading allowance). Above that, register for Self Assessment — taxed at marginal rate. £5k profit on top of £40k salary = £1,000 tax-free + £4,000 × 40% = £1,600 tax + Class 2/4 NI ≈ £150.
Mustafa Bilgic
Reviewed by Mustafa Bilgic · UK Calculator Editor ·

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Side hustles — Etsy, eBay reselling, Vinted, Uber, Deliveroo, freelance copywriting, OnlyFans, Airbnb — are increasingly common. HMRC's £1,000 trading allowance gives a tax-free buffer, but above that you must declare. New 2024 rules force online platforms to share your data. This calculator shows your real tax bill.

How side hustle tax calculator works in 2025/26

The £1,000 trading allowance:

  • If gross income from your side hustle is ≤£1,000/year — totally tax-free, no need to file
  • Above £1,000 — you must register for Self Assessment
  • Trading allowance can be used INSTEAD of expenses (whichever gives a better outcome)
  • £1,000 trading + £1,000 property allowance are separate — you can have both

HMRC platform reporting (since Jan 2024):

Online platforms (Etsy, eBay, Vinted, Airbnb, Uber, Deliveroo, Amazon, Vinted, Depop, etc.) must report seller earnings to HMRC if you exceed £1,750 OR 30 transactions in a calendar year. HMRC cross-references this with your tax returns.

Common side hustle scenarios:

  • Selling personal items (declutter, no profit motive) — NOT taxable as trading income. CGT might apply if items sold > £6,000 each (or £3,000 from 6 April 2024).
  • Reselling for profit (buy low, sell high) — TRADING — taxable
  • Crafts/handmade — TRADING — taxable
  • Gig economy (Uber, Deliveroo) — Self-employed earnings — taxable
  • Online tutoring, freelance — Trading — taxable
  • Hobby that doesn't make profit — Generally not taxable, but show losses if you're trading and want to offset

Worked example: Etsy seller £800 sales, has full-time job

Under £1,000 trading allowance. No tax owed. No need to register for SA. Just keep records in case HMRC asks.

Gross: £40,000 → Take-home: £32,319.60/year (£2,693.30/month)

Worked example: eBay reseller £5,500 profit + £45k employment

£1,000 allowance free. £4,500 taxable @ 40% = £1,800. Class 2 NI £179. Class 4 NI: £4,500 × 6% (within band) = £270. Total extra tax £2,249.

Gross: £50,500 → Take-home: £37,300.00/year (£3,108.33/month)

Worked example: Uber driver £20k self-employed only

Profit £20,000. PA £12,570. Taxable £7,430 × 20% = £1,486. Class 2 £179. Class 4: £7,430 × 6% = £445.80. Total £2,110.80. Payment on account: 2 × £1,055.40 = £2,110.80 in Jan + Jul next year.

Gross: £20,000 → Take-home: £17,889.20/year (£1,490.77/month)

Frequently asked questions

Do I need to declare £200 of Vinted sales?
If selling YOUR PERSONAL ITEMS at less than you paid (decluttering): no — not trading income. If you BUY items specifically to RESELL for profit: yes (above £1,000 trading allowance), it's taxable. HMRC distinguishes "personal disposal" from "trading".
What's the new HMRC platform rule from 2024?
Since 1 January 2024, platforms (Etsy, eBay, Vinted, Airbnb, Uber, etc.) must report sellers earning >£1,750 OR with 30+ transactions per calendar year to HMRC. If your earnings exceed £1k/year you should file regardless of platform reporting.
Can I deduct expenses from side hustle income?
Yes — choice between (a) £1,000 trading allowance (no proof needed) or (b) actual expenses (receipts/records needed). Use whichever is higher. Common expenses: materials, postage, software, marketing, mileage, home office portion, training.
Do I owe Class 2 NI on side hustle?
Class 2 NI £3.45/week (£179.40/year) is voluntary if profits under £6,725, mandatory above. Even if voluntary, paying gives you state pension qualifying year — often worth it for low-profit years.
What if my side hustle makes a loss?
Losses can be offset against same-year other income (sideways relief), carried forward to future profits, or carried back 1 year. Detailed rules in BIM85015. You must register for SA to claim losses even if no tax owed.
Are CGT or VAT relevant?
VAT: only if turnover >£90k/year — most side hustles miles below. CGT: applies to disposals of investments and property, usually not retail/services. Personal items >£6,000 (or £3,000 from April 2024) trigger CGT — rare for side-hustle items.
Do I pay tax on tips and gratuities?
Yes — all tips are taxable income. If paid via your employer (e.g. restaurant tronc), tax is via PAYE. If cash directly to you (Uber tips, Etsy thank-you bonuses), declare via SA. £1k trading allowance still applies to small unstructured tips income.

Official UK Sources

Last reviewed: May 2026 against HMRC 2025/26 rates.

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