UK Triples Side Hustle Tax-Free Allowance to £3,000
Prime Minister Andy Burnham announced the UK will increase the tax-free trading allowance from £1,000 to £3,000 starting in April 2027.
The Government of the United Kingdom will increase the tax-free trading allowance for side hustles from £1,000 to £3,000 starting in April 2027. Announced by Andy Burnham as part of the Autumn Budget, the change aims to support citizens earning extra income through activities such as tutoring, dog-walking, and reselling goods on digital platforms like eBay, Vinted, and Etsy.
Approximately 1.4 million people are expected to benefit from the policy. Of these, 400,000 individuals will see an average tax saving of £380, and 100,000 will no longer be required to report their trading income to authorities. The move responds to a surge in side-hustle activity, with the number of people selling goods via digital platforms growing from 450,000 in 2024 to 2.6 million last year.
Under the new rules, individuals earning over £3,000 can choose between the flat allowance or deducting business expenses to calculate taxable profits. The allowance applies to gross income but does not cover the sale of personal belongings. The current £1,000 limit remains in effect for the 2026/27 tax year. HM Revenue and Customs continues to warn that failure to declare taxable income may result in penalties and interest.
