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Helming Christmas Setting up a market stall, creating social media content or selling items online can be a great way to increase your income as festive costs rise.
But anyone who is doing seasonal self-employed work this Christmas is being urged to make sure taxes are in order.
Tax experts are warning that those who fail to comply HM Revenue and Customs (HMRC) Due to the rules of earning money from useless activities, you may have to face fines and penalties.
UK law states that everyone gets a trading allowance, meaning you can earn up to £1,000 each tax year on top of your main job without paying tax. But any earnings above that are subject to taxation, which will depend on how much you are earning.
According to HMRC, anyone who made more than £1,000 from a side hustle in the 2024-25 tax year (6 April 2024 to 5 April 2025) will need to register for self-assessment as a sole trader. You must then file a tax return and pay any outstanding tax by January 31, 2026.
Any sales made this Christmas will fall in the 2025-26 tax year and must be declared by the end of January 2027, and any tax on them must be paid.
HMRC launches Help for Hustles Campaign To help traders understand when tax rules apply to them.
It details important differences in making money – such as the difference between selling unwanted personal belongings to declutter households and selling items made to make a profit.
It provides a free and anonymous checker for those who are unsure where they stand, and sets out specific guidance for content creators.
The Tax Office warns that the £1,000 allowance applies to all activities – so if you made £800 from selling crafts online and £400 from content creation, you would still exceed your business allowance and have to pay tax.
It also says that traders should be aware that this is the figure before expenses and is not the same as profit.
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If you earn less than £12,570 a year you won’t need to pay tax if you have no other income, as this is your personal allowance which is not subject to tax.
You may also be able to deduct certain “allowable expenses” from your tax bill if they are costs that are solely related to your side hustle. This may include things like office costs for stationery, and you can ask HMRC for advice if necessary.
“As your side grows, any unpaid tax can come into the spotlight,” HMRC said. “If you haven’t told us about the extra money you earn, it could lead to an unexpected and possibly very large tax bill.
“That’s why it’s really important to stay on top of your tax matters. So, make sure you pay what you owe as soon as possible and speak to us as soon as possible if you haven’t paid for previous tax years.”