CRAFTERS and creators who turn their hobbies into festive money-making schemes are being warned the taxman may be looking over their shoulders.
Christmas can be an expensive time for many – and statistics show there is an increasing number of people turning to side hustles to boost their income.
But what some don’t realise is that little bit of extra cash on the side might be subject to income tax – and HMRC is watching.
Leading accountant, Victoria Thompson, says a worrying number of people are unaware that they are breaking tax rules.
Victoria, a Chartered Accountant at J F Hornby & Co, said: “It’s no secret that the cost of Christmas has increased dramatically in recent years, leading to many people starting their own side hustles so that they can give their families the best Christmas possible.
“Some people are very successful in their venture and manage to make a considerable income from it, sometimes generating thousands of pounds. While this is great for their finances, it does mean that their extra earnings will be subject to tax rules.
“Whether you’re creating and selling Christmas themed decorations, cards, clothing or sweet treats, it’s important to double check if you need to tell HMRC about your additional income.
“If you don’t do this, you may fall victim to a nasty New Year shock in the form of an unexpected tax bill.”
Anyone earning more than £1,000 in addition to their main job is required to pay tax to HMRC.
However, it’s also important to note that not all extra earnings will fall under this rule. For example, if you’re simply selling some old clothes on an online platform, then it’s unlikely that you’ll need to tell HMRC.
On the other hand, if you’re selling things for profit, like digital designs or upcycled furniture, or operating from a pop-up market stall, your side hustle may be classed as ‘trading’.
Anyone who earned more than £1,000 from side hustles in the 2024 to 2025 tax year will need to register for self assessment as a sole trader, file their return and pay any tax due by 31 January 2026. And festive traders operating in this Christmas period will need to do the same next year.
To check whether your additional income is subject to tax, visit here Check if you need to tell HMRC about additional income – GOV.UK
If you need support in calculating or submitting your tax return, the team at JF Hornby & Co are here to help.
You can get in touch by calling 01229 588 077 or emailing jfh@jfhornby.com
