The Prime Minister’s new rules make it easier to keep more of what you earn
From selling items on Vinted to turning your skills into services, there are so many ways to earn extra money to help make ends meet. People will soon be able to keep more of that cash as Andy Burnham announces a massive tax change coming in 2027.
Quietly put through as part of the latest Autumn Budget, people who top up their income with a side hustle now have much more room before they must report their earnings to HMRC. The Labour leader claims the cap will soon be “tripled”.
Speaking in an Instagram video, the Prime Minister said: “Maybe you’re a keen Vinted seller, maybe you do some dog walking or pet sitting. Maybe you’re a teacher doing some extra tutoring.
“Up to now, if you earn more than £1,000 a year from it, you have to start paying tax on it. But I think if you’re putting in the extra hours, more of that money should stay with you.”
He said: “We’ve tripled the amount you can earn from a side hustle without paying a single penny of tax on it. From April next year, you’ll be able to earn up to £3,000 tax-free and without having to report it to HMRC.”
The Prime Minister claims that, for around 400,000 people, that could mean “an average £380 off their tax bill”. He adds that this move is meant to “make it easier to earn a bit extra” or “give that business idea a go”.
It is important to know that these new limits do not come into force until the current tax year ends (April 2027). Until then, the current rules still apply – and ignoring them could lead to penalties.
The GOV.UK website confirms: “If we find that you needed to pay tax on your income, but you didn’t tell us about it, you may be given a penalty. HMRC also charges interest on any late payment of tax, so the longer you put off paying, the more you may owe. You might also get penalties if you don’t pay your tax on time.”
What are the current ‘side hustle’ tax rules?
Whether it’s casual earnings or a regular second income, there are tax rules that everyone must follow. As of November 2026, the current limits and rules remain unchanged.
A casual hobby becomes a taxable ‘side hustle’ if it makes more than £1,000. The UK Government said: “Whether you get cash in hand or money paid straight to your bank account, you’ll need to tell HMRC so you can avoid any tax surprises.”
If you’re just selling unwanted personal belongings from time to time, you probably don’t need to tell HMRC, but it’s a good idea to check to make sure. Use the free GOV.UK tool to check if you potentially owe tax on your earnings.