Side hustles HMRC warns sellers over tax on festive earnings

This is a busy time of year for the thousands of people who earn a bit of extra income from a festive side hustle such as running a stall at a Christmas market or selling online.

- Rupert Jones

The UK's army of crafters, artisans and designers are being urged to check if they need to tell HM Revenue and Customs about their earnings.

Those who do not comply with the rules risk being landed with an unexpected tax bill and penalties.

Under UK law, everyone has a trading allowance of £1,000 each tax year, which means you can earn up to that much on top of your main job without paying tax.

As the festive season approaches, HMRC's Help for Hustles campaign is reminding anyone earning extra income from activities such as selling handmade Christmas decorations or items that have been bought to sell on that they will need to tell the tax authorities if they earn more than this limit.

The campaign's guidance highlights the important distinction between simply decluttering your home by selling unwanted personal belongings something that does not usually need to be reported to HMRC - and trading activities such as making items to sell for profit, which may be taxable.