Is Your Online Side Hustle on HMRC’s Radar?

I have a confession to make.

Lately, I’ve developed a questionable bedtime habit—scrolling through Facebook Reels. The algorithm has figured out that I love a good charity shop bargain, so my feed is now flooded with people showing off their thrifted finds.

I've fallen down the rabbit hole of 'Thrifted vs Styled' and "£100 worth of items for £1" videos and I love it!

Many of the creators I watch (especially in the US) don’t just keep their treasures—they resell them for a profit. This got me thinking: when does a side hustle like this become taxable? And could it trigger an HMRC investigation?

Will HMRC Come Knocking at Your Door?

There’s been a lot of talk recently about online platforms sharing transaction data with HMRC, sparking fears that tax officers will be chasing people down over small sales. Let’s clear this up: selling the odd item from your wardrobe isn’t going to land you in tax trouble. If you’re just having a clear-out, you can relax—HMRC won’t care about that dodgy outfit you sold from cousin Sandra’s wedding 10 years ago.

However, if you’re regularly buying items with the intention of reselling them for a profit, that’s a different story. HMRC will be keeping a close eye on people who are running unregistered businesses online but not declaring their earnings.

What's Changing and Who Should be Concerned?

Online platforms are now required to share transaction data with HMRC. The first batch of data for 2024 has already been sent, covering sales made in late 2023 and early 2024. HMRC will cross-check this information with tax returns and look for discrepancies.

👀 High earners come first – HMRC will focus on the biggest sellers first, those making substantial profits and failing to declare them.

⚠️ Casual sellers aren’t the priority – If you’re making small amounts of money here and there, HMRC is unlikely to investigate you. However, if you’re making consistent profits, even at a lower level, you may still be contacted.

💰 ‘Nudge’ letters are coming – Instead of jumping straight into investigations, HMRC will likely send ‘nudge’ letters to encourage people to voluntarily declare any untaxed income.

How to Stay on the Right Side of HMRC

If you’re earning from an online side hustle, follow these steps to stay compliant:

✅ Know the thresholds – If you make under £1,000 per year, the Trading Allowance means you don’t need to declare it. Anything above this, and you’ll need to register as self-employed.

✅ Keep records – If you’re regularly selling, keep track of your sales, costs, and profits. Good record-keeping is key to avoiding issues later.

✅ Don’t ignore a nudge letter – If HMRC contacts you, don’t panic, but don’t ignore it either. If you owe tax, it’s better to declare it voluntarily than face penalties.

Finally...

If you’ve been treating your side hustle like a hobby but the profits are rolling in, it might be time to reassess your tax obligations. HMRC isn’t out to get small-time sellers, but if you’re running a business under the radar, now’s the time to get your house in order.

At the end of the day, if you want to make money, you need to be prepared to pay tax on it. But that doesn’t mean you have to pay more than necessary. There are always ways to be more tax-efficient, from claiming expenses to structuring your income wisely. This is where seeking advice from a trusted tax professional can make all the difference—helping you stay compliant while keeping more of your hard-earned cash.

Want expert tax advice for content creators? Cre8tax is here to help! Get in touch and let’s make sure you’re covered.

Call us on 0800 0016 878 or email us at info@cre8tax.co.uk