Great news for UK side hustlers and small business owners! The government is changing tax rules, allowing people who earn up to £3,000 from side jobs to skip the hassle of filing a Self-Assessment tax return. This is a big upgrade from the previous £1,000 limit and could benefit around 300,000 people.
This new rule, expected to be announced by Tax Minister James Murray, is part of HMRC’s plan to simplify taxes and help the growing number of small earners and online sellers.
Who Will Benefit from This Change?
This update is perfect for people earning money through side jobs, such as:
- Selling items online like vintage clothes or handmade crafts
- Dog walkers, gardeners, and local handymen
- Taxi drivers and rideshare workers
- YouTubers, TikTokers, and content creators
If your side income is £3,000 or less, you won’t need to file a Self-Assessment tax return anymore. Among the 300,000 people affected, around 90,000 will owe no tax at all.
Why Is HMRC Doing This?
The UK government wants to make taxes simpler, fairer, and more modern. The goal is to:
- Save time and paperwork for small earners
- Allow HMRC to focus on larger tax issues
- Encourage people to grow their income without fear of tax confusion
- Reduce mistakes by using smarter technology
- Support small businesses in growing their income stress-free
More Major HMRC Updates Coming Soon
1. Better Customer Service Using AI
HMRC will modernise its customer service systems using tools like:
- Voice biometrics for faster security checks
- AI-powered assistance to guide users to the right help on GOV.UK
- Dedicated teams to solve long-standing tax issues
2. Tougher Action Against Tax Cheats
New steps to stop tax fraud will include:
- Targeting “phoenixism” – where business owners dodge taxes by closing and reopening companies
- Introducing a reward scheme for whistleblowers who report serious tax evasion
3. Smoother UK-US Trade
A new digital trade pilot project with the U.S. will make customs faster using real-time data, benefiting trusted traders. With £115 billion worth of UK-US trade, this is a big step for business growth.
4. Easier Rules for Temporary Imports
The customs-free period for temporary imports like art, antiques, and event equipment will be extended from 2 to 4 years, helping artists, galleries, and exhibitors manage costs better.
What Experts Are Saying
Ellen Milner, Chartered Institute of Taxation:
“A simpler tax system helps businesses focus on growth instead of paperwork.”
Eve Williams, CEO of eBay UK:
“Great news for side hustlers. Less paperwork means more time to grow their businesses.”
The increase in the trading income threshold from £1,000 to £3,000 is a huge relief for UK side hustlers. It reduces paperwork, saves time, and makes growing a small business easier than ever. Combined with HMRC’s customer service upgrades, anti-fraud efforts, and digital trade improvements, the UK is clearly moving toward a smarter, more supportive tax system for all.
FAQ’s
Who benefits from the £3,000 HMRC threshold change?
People with side hustles earning up to £3,000 per year from platforms like YouTube, online sales, or local services like dog walking or gardening.
Will I still need to file a tax return if I earn under £3,000?
No. If your trading income is under £3,000, you no longer need to file a Self-Assessment tax return, unless you have other reasons to file.
Why is HMRC raising the trading income threshold?
To simplify tax reporting, reduce paperwork, and support small earners so they can focus more on growing their income and less on admin.
Are there other changes coming to HMRC?
Yes, including AI-based customer service improvements, stricter action against tax fraud, digital UK-US trade pilots, and relaxed customs rules.
What should I do if I’m unsure about my tax status?
You should contact HMRC directly or speak to a certified tax advisor to understand your situation clearly and avoid any errors.
