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Start filing →If you run an Etsy shop in the UK, you may be wondering whether your earnings count as taxable income. The short answer: it depends on how much you earn. The key figure is £1,000 — and most casual sellers fall under it.
This is total gross Etsy income before deducting fees or costs.
When Does Etsy Income Become Taxable?
HMRC treats Etsy shop income as trading income. If your total gross earnings from Etsy (and any other self-employed activities) exceed £1,000 in a tax year, you must:
- Register for Self Assessment by 5 October after the tax year ends
- File a tax return and pay any tax owed by 31 January
If your Etsy income is under £1,000 gross, the trading allowance covers you and no action is needed.
What Expenses Can Etsy Sellers Claim?
If you register for Self Assessment, you can deduct allowable expenses from your Etsy income before calculating tax. Common deductions include:
- Etsy listing fees and transaction fees
- Etsy Payments processing fees
- Materials, supplies and packaging
- Postage and shipping costs
- Photography equipment used for your shop
- Proportion of your phone and internet bill
- Home workspace costs (if you make from home)
- Advertising costs (Etsy Ads, social media)
These deductions can significantly reduce — or eliminate — the tax you actually owe.
How to Report Your Etsy Income to HMRC
Total your Etsy earnings
Log in to your Etsy account and download your annual payment account statement. Add up all payments received during the tax year (6 April to 5 April).
Subtract your allowable expenses
Add up all business costs — fees, materials, postage, etc. Your taxable profit = gross income minus expenses. Alternatively, claim the £1,000 trading allowance if that is simpler.
Register for Self Assessment
If your gross Etsy income exceeds £1,000, register with HMRC online. Do this by 5 October after the end of the relevant tax year.
File and pay by 31 January
Complete your Self Assessment tax return online. Any tax owed must also be paid by 31 January.
File your Etsy income with SubmitFox
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SubmitFox submits your Self Assessment directly to HMRC. Covers all income types including Etsy shop earnings.
Common Questions
If your total Etsy income (and any other self-employed income) is under £1,000 gross in a tax year, the trading allowance covers you and no action is needed. Occasional selling below that threshold requires nothing.
From January 2024, Etsy is required by law to report seller income to HMRC when annual earnings exceed certain thresholds. HMRC increasingly cross-references this data with filed returns, so proactive filing is always the safer approach.
HMRC makes a distinction between hobby and trading activity, but if your Etsy income exceeds £1,000 per year, HMRC is likely to treat it as trading income regardless of whether you consider it a hobby. If in doubt, file.
Yes. Etsy Plus and other subscription fees paid to run your shop are allowable business expenses and can be deducted from your income before calculating your tax liability.
No. The £1,000 trading allowance applies to all your self-employed income combined. If you earn £600 on Etsy and £600 on eBay, your total is £1,200 and you are over the threshold.