What is the UK Side Hustle Tax?

If you love making some extra cash by selling your second-hand clothes on sites like Vinted or Depop, you should be aware of a rule that came into force on New Year’s Day 2024.

Known as the side hustle tax — it’s not a new thing, but what’s changed is that sites like Vinted now notify HMRC if you sell or earn over a certain amount.

Read on to discover more about the rules.


What is a Side Hustle?

A side hustle is when you earn money from selling things or providing services alongside your main job.

Types of Online Side Hustles

Selling second-hand clothes on platforms like Vinted or Depop are great ways to make an extra bit of cash.

Other popular side hustles include setting up an eBay shop, selling handmade items on marketplaces like Etsy or Not On The High Street, or even renting out a spare room on Airbnb.


What is the Side Hustle Tax UK?

On 1 January 2024, new rules about the tax you must pay on your side hustle came into force. From now on, companies such as Vinted and Depop must report the income generated by UK sellers through their sites directly to HMRC.

Part of a global crackdown on tax dodgers, this new initiative will apply to things like sales of second-hand goods and handmade items, as well as money made through offering services on sites like Fiverr and Upwork.

They won’t need to report everyone’s earnings — only those who make over 30 transactions per year or over £1,700 in sales.

However — you should be aware that if you make over £1,000 in sales from your side hustle, you may need to pay tax on it.


Lady with red hair on laptop organising receipts


Will the Side Hustle Tax affect You?

The threshold for online side hustle tax UK is £1,000 per year. This isn’t a new tax.

However, the thing that’s changed is that sites like Depop and Vinted will now have to report the financial details of sellers that make over 30 transactions or over £1,700 per year directly to HMRC.

If you earn more than £1,000 per year from your side hustle, you’ll still need to register as self-employed — even though Depop or Vinted won't report your details until you reach the £1,700 threshold. You will then need to file a self-assessment tax return at the end of the financial year to pay the money you owe. A financial year runs from 6 April one year to 5 April the next.

Do I Have to Pay Taxes on a Side Hustle

Yes. But you’ll only need to pay side hustle tax on money you earn over £1,000. Anything you earn below that amount is tax free.

Even if you’re earning below the £1,000 threshold, it’s a good idea to keep records of your earnings, just in case you’re ever asked for them.

How to Pay Tax on a Side Hustle

You will pay tax on your full-time job automatically through PAYE, but to pay tax on your side hustle, you’ll need to fill in a self-assessment tax return.

There’s a guide on how to fill out your self-assessment tax return here.

You will need to register for a Unique Taxpayer Reference (UTR) number, which takes around ten working days to receive. The deadline for registering for self-assessment is 5 October.

The deadline for completing your tax return by post is 31 October. If you miss this deadline, there is a £100 fine which increases the longer your tax return is delayed.

The deadline for completing your tax return online is 31 January.


Not Sure if You Need to Pay Extra Tax?

It can be complicated to work out whether you need to pay tax on your side hustle UK. If you’re unsure or you just want to know that the next steps are, HMRC has a handy online tool which can help clear things up.


Find Out More about Selling on Depop and Vinted

If you’re keen on really making the most of your side hustle — why not check out our blogs on How to Sell on Depop or How to Sell on Vinted.

Ship Your Sold Clothes with Parcel2Go

If you sell on Vinted, the buyer will pay for shipping, but with Depop — you’re free to any courier you choose.

Whether you sell on Depop or eBay, we’ve got you covered with the cheapest shipping in the UK guaranteed.

And if you sell across multiple platforms - even better! Smart Send, our free shipping management platform, allows you to automate your shipping from different marketplaces and websites. It’s free and makes your shipping experience easier than ever!

Want to win yourself top reviews from your customers? Check out our blog on how to package clothes for shipping.


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