Christmas crafters urged to check tax rules
HMRC is urging anyone earning extra income from trading activities like making Christmas gifts and decorations or running seasonal market stalls to check their tax obligations. Here we share their press release with you. We also include some links to our own LITRG guidance for sellers.
As the festive season approaches, HMRC have issued a press release highlighting their Help for Hustles campaign which can support people earning extra income during the festive season to understand their tax obligations.
The campaign’s guidance explains the important distinction between simply selling unwanted personal belongings – which doesn’t usually require reporting to HMRC – and trading activities like making items to sell for profit, which may be taxable.
If you think your activity might be taxable – and we have previously published a flowchart trying to provide clarity on the rules - it is important to understand the following two key issues:
- You may not be able to use (or want to use) the £1,000 trading allowance to cover your side hustle income in all scenarios.
For example, when considering the £1,000 limit you have to add up all your sources of trading or miscellaneous income. So for example, if you are already self-employed as your main job, you would need to add your day-to-day self-employment income (trading income) to your side hustle income (trading or miscellaneous income). This might come to more than £1,000, which means the trading allowance won’t fully cover the side hustle income. We explain it all, with examples, on our website.
Remember you do not need to rely on the trading allowance to cover any money you make from selling old personal possessions.
- The online platform reporting rules mean that digital platforms like Etsy, Ebay and Vinted must report information about online sellers in 2025 if they make €2,000 (approximately £1,700) or more, OR complete 30 or more transactions within a calendar year.
Having your information reported to HMRC does not automatically mean you have to fill in a tax return or owe tax but but it is going to make it easier for HMRC to spot if people have not paid tax when they should have. We explain more about the reporting rules on our Digital platform reporting rules page.
People selling direct to the public at Christmas markets will not have this income reported to HMRC by a platform. But HMRC have lots of different information gathering powers, including from banks and card payment providers so you should still report the income and pay tax where required. Not doing so when you know you should, particularly if you take active steps or make arrangements to try and hide information from HMRC, may well be considered tax evasion. HMRC take this seriously, so it is important to ensure you are meeting your reporting obligations.
