Etsy and hobby sales alongside an employed job

Katerina Galkina · EN · 07/10/2026

A hobby can still be a trade

Calling an activity a hobby does not exempt its income from tax rules. If you make products to sell, or buy items intending to resell them at a profit, HMRC generally regards that as trading. Selling your own unwanted possessions is a different situation. HMRC's online-income guidance ↗ explains the distinction with examples.

Having an employed job taxed through PAYE does not settle the position of a separate business. Start records with your first sale, even if you do not yet know whether the venture will be profitable. Distinguish personal disposals, handmade goods and purchased resale stock.

Combine income from different channels

The trading allowance normally concerns £1,000 of total annual gross trading income before expenses, combining relevant activities. It is not a separate allowance for Etsy, Instagram and each craft fair. Check the trading allowance conditions ↗, including exclusions.

The registration threshold and your eventual tax bill are different questions. Expenses can reduce profit but do not turn gross sales above £1,000 into income below the registration threshold. A UK tax year runs from 6 April to 5 April; a platform's calendar-year report needs allocation to the correct period.

Keep records that explain the figures

Retain sales values before fees, refunds, postage, materials invoices and commission statements. A net payment arriving in your bank account is not necessarily your turnover. Separate personal purchases from business costs.

When calculating profit, compare allowable actual expenses with any available trading allowance. You cannot deduct the allowance and actual expenses against the same income. HMRC's allowable-expenses guide ↗ sets out the main categories. Materials bought for personal use do not become business expenses simply because you also run an Etsy shop.

Reporting to HMRC and the platform

Use the official additional-income checker ↗, then register and submit Self Assessment if required, including employment information from your P60 or P45. Establish the deadlines before the end of your first trading year.

A platform may request tax information and report details to HMRC under the digital-platform rules ↗. Such a request does not automatically mean you owe tax, and platform reporting does not replace your return. Do not treat a platform's reporting threshold as a personal tax exemption.