Online sellers with a day job: file by 30 December

If you have a job and sell online on the side, filing your 2025/26 return online by 30 December lets a tax bill under £3,000 come out of your pay instead.

Hannah's Etsy tax bill for 2025/26 is £960. If she files online by 30 December 2026, she never pays it as a lump sum: HMRC collects it through her tax code for 2027/28, at £80 a month from April 2027. Miss that date and the whole £960 falls due on 31 January. (Hannah is an illustration, not a real person.)

The same route is open to anyone with a job who sells online on the side and owes less than £3,000.

The three conditions

HMRC's page on paying through your tax code sets three, and you need all of them:

you owe less than £3,000, and making a part payment to get under that does not count;
you already pay tax through PAYE, as an employee or on a company pension;
you file online by 30 December, or on paper by 31 October.

If you meet all three, HMRC does it automatically, unless you ask it not to on the return. The tax comes out of your salary in 12 equal instalments, alongside your usual tax, through your tax code for 2027/28, so expect that code to change. It will not work if you do not earn enough through PAYE for HMRC to collect it, if it would mean paying more than 50 per cent of your PAYE income in tax, or if you would pay more than twice as much tax as you normally do. And if you pay Class 2 National Insurance, that part cannot go through your tax code, so it is still paid by 31 January.

Only trading counts

HMRC's guidance on income from online platforms says that if you are selling personal possessions, "you probably do not have to pay Income Tax on these". Buying to resell, or making things to sell, is different. The first £1,000 of trading income in a tax year is covered by the trading allowance. Above that, you report the profit. Our guide to how Etsy income is taxed works through the allowance and the profit sum.

Hannah's numbers

Hannah teaches in Lewisham on a salary of £38,000 and sells handmade candles on Etsy. In the 2025/26 tax year the shop took £14,000 and cost her £9,200 to run, leaving a profit of £4,800.

Her salary uses up her £12,570 personal allowance, so the whole £4,800 is taxed at the basic rate of 20 per cent: £960.
Class 4 National Insurance only starts on profits above £12,570, so there is none to pay.
She files online on 12 December. HMRC collects the £960 through her 2027/28 tax code, £80 a month from April 2027, instead of in one payment on 31 January 2027.

Because her Self Assessment bill is under £1,000, she has no payments on account to make either. Had she filed on 2 January instead, there would be no penalty as long as she filed and paid by 31 January, but the whole £960 would be due at once.

Before 30 December

Pull your sales, fees and costs for 6 April 2025 to 5 April 2026 from each platform you sell on.
Work out if you were trading and, if so, what the profit was.
File online, and do not ask HMRC to stop collection through your tax code.
Check your 2027/28 tax code when HMRC sends it. Our guide to how tax codes work when you have more than one income explains what it should show.

The 31 January deadline gets the attention. For a seller with a payslip, 30 December is the one that changes how the bill is paid.

About the author

Harvey Dhillon is Founder and CEO of Zmartly, a UK accountancy firm for ecommerce sellers. He grew up in West London and began his career in investment banking finance at Barclays, before going full-time on Zmartly in 2020. He is a Chartered Management Accountant (ACMA, CGMA).

Featured photo by Daniel Korpai on Unsplash.