Hundreds of thousands of side hustlers—including Vinted sellers, drivers, and dog walkers—are set to benefit from a major tax shake-up that will free them from filing tax returns. The government’s move aims to cut red tape and support those juggling additional income streams alongside full-time jobs.
The key change is the increase of the Income Tax Self Assessment (ITSA) reporting threshold for trading income from £1,000 to £3,000. This means that many self-employed individuals, from online sellers to freelance content creators, will no longer have to go through the hassle of submitting self-assessment tax returns, Treasury officials say.
Approximately 300,000 people will be affected by the reform, with around 90,000 of them owing no tax at all, removing the requirement to report their earnings. The side hustle economy has boomed in recent years, especially during the pandemic, as more people looked for alternative income sources. Platforms like Vinted, eBay, and Depop have surged in popularity as consumers turn to second-hand shopping amid concerns about fast fashion.
For those who still need to pay, a new “simple online service” will make it easier to manage payments. James Murray, Treasury minister, described the change as a victory for Britain's growing number of side hustlers. “From selling second-hand clothes to streaming content online, we are transforming HMRC to help hardworking Brits make the very most of their entrepreneurial spirit. Taking hundreds of thousands out of the tax return process means less paperwork and more time to grow their business.”
The announcement came as part of a speech marking 20 years of His Majesty’s Revenue and Customs (HMRC). Murray also promised improvements to HMRC’s customer service, a long-standing source of frustration for taxpayers, and revealed a plan to ease import restrictions on fine art and antiques under a new scheme.
The changes are designed to be part of a broader initiative to modernise HMRC and make it “quicker, fairer, and more modern.” A pilot programme with US customs is also in the works to streamline trade processes between UK and US businesses.
Additionally, the government is introducing a new tax fraud whistleblower scheme inspired by successful models in the US and Canada. Under this system, those who report serious tax fraud could receive financial rewards based on the recovered tax revenue. Murray emphasised: “We are moving faster to overhaul HMRC and ensure it supports small businesses while cracking down on tax fraud. These reforms will put more money in people’s pockets and ensure that everyone plays by the rules.”
Other measures announced in Murray’s speech include tougher enforcement on corporate tax fraud, closing loopholes in company registrations, and increasing compliance checks on rogue directors. To modernise operations, HMRC is testing AI-driven customer support to improve taxpayer assistance.
As the first minister to sit on HMRC’s board, Murray says he has worked with private sector giants like NatWest, Octopus Energy, and John Lewis to explore ways to improve efficiency and customer service. With these sweeping changes, the government aims to reduce bureaucracy for small-time entrepreneurs while ensuring large-scale tax fraud is tackled more aggressively.
