Side-hustlers are set to benefit from a significant shake-up in Self-Assessment rules, with the Treasury announcing a rise in the reporting threshold for trading income.
From later this Parliament, individuals earning up to £3,000 a year in gross trading income – up from the current £1,000 threshold – will no longer be required to file a Self-Assessment tax return.
Image courtesy of Kampus Production
The move is expected to affect around 300,000 people, including those earning money from selling items online, offering gardening or dog-walking services, driving taxis, or creating content for social media platforms.
According to Treasury estimates, around 90,000 of those affected will have no tax to pay and will no longer need to report this income to HMRC at all. Others will benefit from a new simplified online system to pay what they owe, without needing to complete a full Self Assessment.
The measure forms part of the Government’s “Plan for Change”, which aims to modernise and simplify the way HMRC operates, making it easier for people to manage their tax affairs while supporting entrepreneurial activity.
Paul Hornby, Managing Director of JF Hornby & Co, said: “This is a welcome step that recognises the growing number of people earning modest amounts on the side.
“Whether it’s a weekend dog-walking round or selling vintage clothes online, it makes sense to streamline the reporting process.
“However, while this change will lift the admin burden for many, it’s still important for people to understand what counts as trading income and whether they fall above or below the new threshold. As ever, getting the right advice is key.”
Exchequer Secretary to the Treasury, James Murray, said the changes are designed to make HMRC work “for the digital age”, adding: “We’re making it easier for Brits to make the very most of their entrepreneurial spirit.”
