The festive season is upon us, and with it come all the additional expenses that we are trying to cover without falling into the deep pit of financial ruin. This is why so many take on side hustles to make an additional income. However, “they will need to tell HMRC.” Christmas crafters warned of tougher rules this season, especially as HMRC makes it crystal clear when specific income must be reported. Find out today when your side hustle’s income will result in additional tax administration.
‘Tis the season to benefit from side hustles
Several Christmas markets have already opened across the UK, and more people are succumbing to the festive spirit as we speak. Unfortunately, along with all the festivities comes significant seasonal increases to certain goods and services, with more people turning to side hustles to earn some extra quid for the holidays. Data from the Office for National Statistics has revealed that nearly 1.32 million Britons are earning a second income.
However, people who earn second incomes from side hustles are significantly unaware that they must register to pay taxes. According to a 2023 report by HMRC, figures indicate that 1 in 10 Britons operate in the hidden economy, and 65% of them are side hustlers. Now, especially in the festive season, HMRC has warned Christmas crafters of stricter tax rules that must be adhered to.
Christmas crafters warned of stricter rules this season
In the spirit of saving money and avoiding penalties, HMRC has already warned millions of Britons who are forgetting to complete a vital tax step. Now, in the season of side hustling, it has also launched a campaign called Help for Hustles to assist side hustlers navigate the stricter tax rules this season, and beyond. This way, people who earn a second income can ensure they obey tax laws.
When to report income earned from a side hustle
Side hustlers who earn a second income from trading activities must register as sole traders for Self Assessments under certain conditions. Second income earned from trading activities must be reported:
- If profit is earned from crafting seasonal items such as Christmas decorations, seasonal sales of upcycled items, or running a market stall
- If it is more than £1,000 in total for combined trading activities
- If it was earned in the 2024/2025 tax year
Once a Self Assessment tax return has been filed, and you owe taxes, you are advised to settle the outstanding amount by 31 January 2026.
Additional help to say ‘no, thank you’ to unnecessary taxes
According to the official statement from the HMRC, people who conduct their operations on online platforms are also obligated to share their information. This obligation has been in place since the issued statement in December 2024. Online platforms will be expected to provide information on sellers who:
- Make 30 or more online sales
- Earn more than £1,700 annually from online sales
“As the national organisation for market operators, we want to encourage all traders, particularly those who are trading for the first time, to be clear about their tax obligations for tax arising from their earnings, and we welcome the guidance and support provided by HMRC on this important issue.” – The National Association of British Markets’ Deputy Chief Executive
So, as you start your preparations for your seasonal trading activities, always ensure that you follow HMRC’s Help for Hustles campaign to ensure that you remain compliant with your tax obligations. This will help you avoid unnecessary tax penalties, which is vital in the current expensive day and age. In other tax news, pensioners are now forced to face new homeownership regulations. These regulations follow the DWP’s new Inheritance Tax shake-up, resulting in a domino effect across the UK.
Disclaimer: This content is informational only and does not supersede or replace the Department for Work and Pensions’ or HMRC’s own publications and notices. Always verify any specific dates and amounts by following the direct links in our article to the institutions or by consulting your local DWP field office or tax advisor.
