Key facts
- The tax-free allowance for side hustles will increase to £3,000 in April 2027.
- The current allowance is £1,000.
- Up to 1.4 million people could benefit from the change.
- An estimated 400,000 people will see their tax bills go down.
- The average saving for those with reduced tax bills is £380.
- Around 100,000 people will no longer need to report trading income to HMRC.
The UK government will increase the tax-free allowance for earnings from side hustles to £3,000 annually starting in April 2027. This change, announced in the budget, aims to simplify tax administration for individuals who earn extra income from hobbies or reselling goods. The current allowance stands at £1,000. The increase is expected to benefit approximately 1.4 million people, with an estimated 400,000 seeing their tax bills reduced. Platforms are now mandated to report seller earnings to HMRC under certain conditions.