Guides for your trade · 6 min read · Updated July 2026 · Written by the Filed Tax team

Tax for Etsy sellers

Handmade, print-on-demand, vintage or supplies — if you sell on Etsy to make a profit, you're trading, and that's taxable once you pass £1,000 a year. Here's the whole picture.

Because you're making or buying things to sell, an Etsy shop is usually trading from the start — unlike clearing out your own wardrobe. Once your income tops £1,000 in a tax year, you'll file a Self Assessment return and pay tax on your profit after costs.

Not sure you even need to file? Take our free 30-second check — no sign-up, no details needed. Do I need to file? →

The £1,000 trading allowance. If your total Etsy income for the year is £1,000 or less (before costs), you usually don't need to tell HMRC. Over £1,000 and you'll file a return.

Etsy shares data with HMRC too. From 2024, platforms report sellers with 30 or more sales, or around £1,700 a year. It's just data-sharing — what you actually owe comes down to your profit.

If you're trading, how much tax will you pay?

You're taxed on your profit — what you sell for, minus your costs — not on your total sales. Most online sellers run their shop alongside a job, so here's that case:

A worked example. Say your shop makes a £5,000 profit over the year, alongside a main job. Your job already uses your £12,570 personal allowance, so the £5,000 is taxed at 20% = £1,000. There's no Class 4 National Insurance, because your self-employed profit is under £12,570.

Because Etsy is built for makers and resellers, an Etsy shop is almost always trading from day one — there's no "clearing out my own things" grey area to worry about.

If selling online is your only income, the first £12,570 is tax-free, then it's 20% tax and 6% Class 4 National Insurance on profit above that. Our how-much-tax guide has the full breakdown.

Heads-up on your first bill. In your first year HMRC often asks for a payment on account towards next year's tax too, so that first 31 January can feel like double. It's normal — we'll tell you the real figure in advance.

Costs you can usually claim

Materials and supplies — everything that goes into what you make or sell.
Etsy fees — listing, transaction and payment-processing charges.
Packaging and postage.
A share of your home used as a workshop or studio.
Equipment and tools, and design or photo software.
Marketing and Etsy Ads.

Rather not work this out yourself?

We prepare and file it for you — every return checked by an experienced Self Assessment filer — from £25 a month.

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How to file, step by step

1. Register with HMRC for Self Assessment by 5 October after the tax year you started. You'll get a UTR (Unique Taxpayer Reference). Here's how →
2. Keep records through the year — what you earned, and receipts for what you spent.
3. File your return online by 31 January (or on paper by 31 October). The dates that matter →
4. Pay what you owe by 31 January.

Common questions

Do Etsy sellers pay tax? If you make or buy things to sell, you're trading — so once your Etsy income tops £1,000 a year you file a return and pay tax on your profit. Selling off your own bits and pieces isn't taxable.

What can I claim as an Etsy seller? Materials and supplies, Etsy listing, transaction and payment fees, packaging and postage, a share of your home workshop, equipment and design software, and marketing.

How much tax will I pay on my Etsy shop? You pay 20% income tax on profit above your personal allowance, plus 6% Class 4 National Insurance once profit tops £12,570. Run as a side hustle on top of a job, expect roughly 20% of the profit.

You make it. We'll make the tax easy.

Returns and Making Tax Digital, done for you — from £25 a month.

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This guide is general information, not personal tax advice. Whether you owe anything depends on your circumstances — chiefly whether you're trading. Figures are for the 2026/27 tax year and can change — always confirm your position on GOV.UK or ask us to check.

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