Side income & Self Assessment

Use the badges of trade. If several of these fit, treat it as trading:

• Profit motive (buy/make to resell at a profit)
• Frequency/organisation (regular, systematic activity; listings, price lists, branding)
• Modification (you improve/assemble items before sale)
• Stock/short ownership (buy, hold briefly, resell)
• Sales method (shopfront/online store, paid ads)

Likely hobby: occasional clear-outs of your own used belongings. Likely trade: buying inventory to resell, producing goods to order, regular paid services.

Trading (self-employment)

• Freelance services (design, coaching, consulting), gig work (rides/deliveries), crafts/Etsy, reselling stock, influencer brand deals.
• Report on SA103 (short or full). Taxed on profit (income minus allowable expenses) or claim the £1,000 Trading Allowance instead of expenses.

Property

• Residential lets, Airbnb/short lets, garage/driveway/storage, land.
• Report on SA105. Either use £1,000 Property Allowance or claim actual expenses. Rent-a-Room relief may apply if it’s a furnished room in your main home.

Selling your own used items

• Usually not trading. No income tax. But Capital Gains Tax (CGT) can bite on rare cases (e.g. valuable art/jewellery; chattels rules), or if it’s actually a trade.

Investments/interest/dividends

• Not “side trade”; still taxable. Go to the main SA100 pages (dividends/interest). Different allowances and rates apply.

• Trading Allowance — £1,000 (gross)
  If total trading turnover for the tax year is £1,000 or less, you can usually ignore it for tax (no registration/return for that income), unless you want to claim expenses/losses, or HMRC has told you to file. Above £1,000, register and report.
• Property Allowance — £1,000 (gross)
  Similar rule for small casual property receipts (not both allowances on the same income stream).
• Rent-a-Room — £7,500
  For letting a furnished room in your main residence (half if shared owners). Elect in/out depending on which gives the better result.

Tip: You can’t claim both an allowance and expenses for the same income. Choose one each year per income stream.

• Trading turnover > £1,000, or property receipts > £1,000 (and not using Rent-a-Room).
• You want to claim actual expenses (because they beat the £1,000 allowance) or claim a loss.
• HMRC has issued you a return or you already file for other reasons.
• Deadlines: Register by 5 October after the tax year; file/pay by 31 January.

• SA100 (main return): your personal details, PAYE income, interest, dividends, Gift Aid, student loan, etc.
• SA103 (Self-employment):
  • If using the Trading Allowance: enter gross income only, tick the allowance, no expenses.
  • If using actual expenses: report full income and allowable costs (platform/transaction fees, materials, mileage, a reasonable share of home costs, phone, insurance, advertising, professional fees).
• SA105 (Property): similar choice—Property Allowance or actual expenses.
• Rent-a-Room: use the RAR section to claim or opt out.
• Student loan: profits can increase repayments.
• Payments on account: profits may trigger advance payments towards next year’s bill.

Allowable costs must be wholly and exclusively for the business. Keep evidence. Apportion mixed-use costs fairly.

• Etsy crafts you make to sell = Trading. Report on SA103; choose allowance vs expenses.
• eBay/Vinted clear-outs of your wardrobe = Usually not trading (keep proof items were yours).
• Buying job lots to flip online = Trading.
• Freelance tutoring/dog-walking = Trading.
• Food delivery / ride-hailing = Trading (self-employment).
• Driveway or storage space let = Property income; consider Property Allowance.
• Spare room in main home = Rent-a-Room may beat property rules.

• Income logs (payout statements, sales reports, bank feeds).
• Expense receipts (platform fees, materials, postage, mileage logs).
• Stock/asset records (what you bought, when, for how much).
• For property: rent schedule, repairs, services, utilities apportionments.
• Keep records for at least 5 years after 31 January filing deadline.