Up to 300,000 people in the UK earning extra income from side hustles such as selling on eBay, renting via Airbnb, or trading on Vinted will soon be exempt from filing a Self-Assessment tax return, under sweeping new changes expected to be announced today by tax minister James Murray.
The reform will see the Income Tax Self Assessment (ITSA) reporting threshold for trading income rise from £1,000 to £3,000 gross. The move is set to benefit hundreds of thousands of part-time traders, freelancers, and casual earners across the country.
Those affected include people making extra cash through dog walking, gardening, driving taxis, or even creating content online — a growing portion of the UK’s informal gig economy.
The announcement, due to be delivered during a speech at an event hosted by the Chartered Institute of Taxation and the Institute of Chartered Accountants in England and Wales, marks a significant shift in how HMRC handles low-level trading income.
An estimated 90,000 of those affected are expected to have no tax liability and, under the new rules, will no longer need to report their income to HMRC at all. Others will be able to pay any tax owed through a simplified digital service.
“Less time on forms, more time to grow”
Exchequer Secretary to the Treasury, James Murray, said:
“From trading old games to creating content on social media, we are changing the way HMRC works to make it easier for Brits to make the very most of their entrepreneurial spirit.”
“Taking hundreds of thousands of people out of filing tax returns means less time filling out forms and more time for them to grow their side hustle.”
“We are going further and faster to overhaul the way HMRC works to make sure it delivers the Plan for Change that will help put more money in people’s pockets.”
Business leaders welcome the change
The move has been broadly welcomed by business leaders and financial experts.
Patricia McGirr, founder of Repossession Rescue Network, called the reform “a tax change that actually makes sense.”
“Less pointless paperwork, more time for people to crack on with earning a living,” she said. “This is great news for side hustlers, and a relief for HMRC staff no longer rummaging down the back of the fiscal sofa for pennies.
Pete Mugleston, Managing Director at Online Mortgage Advisor, added:
“Raising the self-assessment threshold to £3,000 is a welcome move that will simplify tax reporting for thousands of side hustlers and small traders.”
“Many people earning extra income from platforms like Vinted, Etsy, or part-time services will no longer face the administrative burden of filing a tax return, freeing up their time and HMRC’s resources.”
Further reforms on the horizon
In addition to the tax threshold reform, Mr Murray is also expected to announce upcoming simplifications to the government’s Temporary Admission customs procedure — easing temporary imports for sectors such as art and antiques often showcased at UK exhibitions.
A digital pilot with the United States will also be unveiled, aimed at streamlining trade processes for businesses on both sides of the Atlantic.
The minister will further outline HMRC’s renewed focus on cracking down on “phoenixism” — where company directors dissolve firms to avoid paying taxes — and introduce a new reward scheme to encourage informants to report tax fraud.
The announcements come as HMRC marks its 20th anniversary and seeks to modernise tax systems in line with the evolving nature of work and digital trade.
