HM Revenue & Customs (HMRC) is poised to lift the threshold for filing self-assessment tax returns to £3,000, a move expected to spare an estimated 300,000 people the burden of completing annual returns.
The change, which will benefit individuals earning income from activities such as online sales, dog walking or content creation, forms part of the government’s wider plan to streamline HMRC’s operations.
Under the revised rules, approximately 90,000 taxpayers will pay no tax at all, with others able to settle outstanding liabilities via an online platform. The new £3,000 threshold, which replaces the current £1,000 allowance for reporting trading income, will be introduced during this parliament.
James Murray, Exchequer Secretary to the Treasury, commented: “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.”
The policy overhaul addresses the growing number of individuals juggling multiple income streams, including online marketplace sellers whose data has been shared directly with HMRC since 2024.
According to Eve Williams, Vice-President of eBay UK, the announcement “will be welcome news for thousands of UK sellers for whom eBay is a side hustle and a means of supplementing their household income during challenging times.
By removing the paperwork associated with selling online, hopefully we will help these side-hustles grow into fully fledged small businesses.”
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HMRC raises threshold for self-assessment to £3,000