Side hustle sales threshold raised to £3,000

Further information has been released by the Government on the increase in the trading allowance rate and when this will come into effect, but beware; the £3,000 is not a tax relief increase, only an administrative increase.

Up to 300,000 taxpayers will no longer have to file a self-assessment tax return as the Treasury is increasing the annual threshold for reporting from the current £1,000 figure, to £3,000 but not until 2027.

This is designed to help eliminate some of the confusion about what tax is payable on “trading income” and side hustle sales.  It is hoped this will help people trading clothes online, dog walking or gardening on the side, driving a taxi, or creating content online, all of whom are required to complete a tax return under current rules.

However, it is important to note that this is only an administrative change to the threshold to take people out of self-assessment tax returns. Tax will still be payable on applicable sales over the £1,000 tax-free limit.

Please get in touch with your tax clerk if you would like to discuss how these changes might affect you.