Etsy Tax Calculator UK 2025/26
Use this Etsy tax calculator to estimate UK tax on handmade, digital product or craft shop income after allowable business costs.
Tax year: 2024/25 | 2025/26 | 2026/27
Last verified against GOV.UK rates: 7 May 2026.
Methodology: this calculator uses the main Income Tax rates for England, Wales and Northern Ireland, the standard Personal Allowance, and self-employed Class 4 National Insurance rates. It does not cover Scottish Income Tax bands, student loans, pension contributions, VAT, benefits, tailored reliefs, or personal tax advice.
Important: Income tax bands are different if you live in Scotland.
Side Hustle Details
Employment Income
Tax Calculation Results
| Main Income: | £ |
| Side Hustle Income: | £ |
| Side Hustle Expenses: | £ |
| Side Hustle Profit: | £ |
| Estimated Additional Income Tax: | ~£ |
| Estimated National Insurance Contributions: | ~£ |
| Estimated Total Additional Tax (Income Tax + NI): | ~£ |
| Estimated Effective Tax Rate (Income Tax + NI): | % |
Based on this gross side hustle income, Making Tax Digital may apply from . Check HMRC guidance because digital records and quarterly updates may be required.
Previous Calculations
| Main Income: | £ |
| Side Hustle Income: | £ |
| Side Hustle Expenses: | £ |
| Side Hustle Profit: | £ |
| Estimated Additional Income Tax: | ~£ |
| Estimated National Insurance Contributions: | ~£ |
| Estimated Total Additional Tax (Income Tax + NI): | ~£ |
| Estimated Effective Tax Rate (Income Tax + NI): | % |
How to use this etsy tax calculator uk
Use this Etsy tax calculator to estimate UK tax on handmade, digital product or craft shop income after allowable business costs.
The calculator is intended for taxable shop activity. A small hobby can become a trade when you make or buy items with a view to selling them for profit.
Etsy shop profit is usually calculated after business costs such as materials, postage, packaging, Etsy fees and other allowable expenses. VAT, imports and stock accounting can need separate advice.
- Use Side Hustle Income for gross income before expenses or allowances.
- Use Side Hustle Expenses for allowable expenses, or for the deduction you want to model, such as the trading allowance.
- Use Annual Salary for your PAYE salary before tax.
Trading Allowance vs Actual Expenses
The trading allowance can exempt up to £1,000 of gross trading income. If your gross trading income is £1,000 or less, you may not need to tell HMRC, although some circumstances still require a tax return.
If gross trading income is more than £1,000, you can usually choose between deducting the £1,000 trading allowance or deducting actual allowable expenses. You cannot claim both for the same trade.
Official Sources
Etsy Tax Calculator UK examples
Example 1
Hobby seller testing a few handmade items and checking whether gross trading income stays within the £1,000 allowance.
Example 2
Part-time handmade seller with materials, postage, packaging, Etsy fees and photography costs to model as expenses.
Example 3
Larger shop monitoring gross income because Making Tax Digital thresholds look at qualifying income before expenses.
FAQs
Is my Etsy shop a hobby or a trade?
HMRC looks at the facts, including regularity, profit motive, business-like activity and whether items are made or bought to sell. A profit-seeking shop is more likely to be trading.
Can I deduct materials and postage?
For taxable trading, materials, postage, packaging, Etsy fees and other business costs are typical expenses to consider when calculating profit.
Are Etsy fees allowable expenses?
Fees charged for listing, transactions, payment processing or advertising can usually be considered business costs where they relate to the trade.
How should I handle stock?
Stock and materials can need careful record keeping, especially if you buy items before they are sold. Keep invoices and track what relates to business sales.
Does this calculator cover VAT?
No. It estimates Income Tax and Class 4 National Insurance only. VAT registration and marketplace VAT rules are separate.
When do Etsy sellers need Self Assessment?
You normally need to check Self Assessment if gross trading income is over £1,000 in the tax year or HMRC asks you to file.
More Side Hustle Tax Calculators
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Important: This calculator provides estimates based on current UK tax rates. For accurate advice specific to your situation, consult a qualified tax professional or HMRC.