
Side hustles are a great way to increase your income, whether flipping furniture, running an online shop, or renting out your spare room.
But when does that extra cash become taxable? Understanding the rules can help you stay on the right side of HM Revenue & Customs (HMRC) and avoid any unexpected tax bills.
Selling second-hand items
Clearing out your wardrobe or selling old furniture? In most cases, there is no tax to worry about, provided you are just offloading personal possessions.
However, if you sell an individual item for more than £6,000, you might be liable for Capital Gains Tax (CGT).
For example, if you sell a vintage watch for £7,500 after purchasing it for £1,200, the £6,300 gain may need to be reported to HMRC.
Flipping and reselling goods
If you are regularly buying and selling items for profit, whether they are upcycled furniture, vintage clothing, or imported gadgets, you are likely running a business in HMRC’s eyes.
That means your income is taxable. Common examples include:
- Reselling clothes from charity shops or car boot sales
- Restoring furniture and selling it online
- Buying stock in bulk to sell on platforms like eBay or Etsy
Earning from services
Side gigs like dog walking, tutoring, or odd jobs might not feel like a full-blown business, but any money you make still counts as income.
Even if you are just helping out neighbours with gardening or babysitting through an app,
HMRC expects you to declare those earnings if they exceed the £1,000 tax-free threshold.
Making money online
If you create content such as YouTube videos, a podcast, or social media posts, then your earnings are taxable.
This includes ad revenue, sponsorship deals, and even freebies received in exchange for promotions.
For example, if a beauty brand sends you products to review as part of a paid partnership, that is classed as income.
Renting out property or space
If you rent out a spare room, your driveway, or even a second home, you will need to declare your rental income.
The Rent a Room scheme lets you earn up to £7,500 per year before you are taxed. This threshold is halved if you share the income with your partner or someone else.
Why it pays to get it right
Ignoring tax obligations on your side hustle can lead to fines or penalties down the line.
Need help working out your tax position? Get in touch with our team today.