Check tax rules if you have a festive side hustle

People with a festive side hustle have been urged to check if they might need to pay tax.

Christmas can be a great time to earn some extra income, perhaps by making decorations or running a seasonal market stall.

But if you earn more than £1,000 from your side hustle, you need to let HM Revenue & Customs (HMRC) know.

“It’s important to understand when your festive side hustle becomes taxable trading,” said Kevin Hubbard, HMRC’s director of individuals and small business compliance.

“Nobody wants an unexpected tax bill, so anyone earning more than £1,000 from their side hustle should tell HMRC.”

Full guidance on who might be liable to pay tax can be found on the Help for Hustles campaign website.

What do I need to do?

If you earned £1,000 or more from side hustles during the 2024-25 tax year, you’ll need to:

• register for self assessment as a sole trader
• file your return
• pay any tax due by 31 January 2026

You can also use a free online checker on GOV.UK to find out if you need to tell HMRC about additional income.

Many people with side hustles want to scale up

The reminder from HMRC comes just after research from Royal Mail showed that 58% of people with a side hustle want to turn it into their main source of income.

Most of us will be happy just making modest amounts on the side, perhaps by selling unwanted items on Vinted or eBay.

But many clearly think their side hustle could become something much more lucrative.

According to Royal Mail figures, the average amount made by online side hustles is £5,420 a year.

That works out to £452 a month outside their main job.

“There’s serious money to be made even if you only have a few hours a week,” said Saadi Al-Soudani, chief commercial officer at Royal Mail.