From April 2027, a change to the UK tax rules will give individuals a larger allowance for small amounts of additional trading income. The Government is increasing the trading allowance from £1,000 to £3,000 a tax year, potentially making it easier for people to earn a little extra from services or small business activities without having to complete a Self Assessment tax return solely for that income.
For livery yard owners, this could offer some useful opportunities to generate additional income from services such as clipping, horse transport, catch-up services and other equestrian-related work. However, there are some important distinctions to understand: this is not a £3,000 allowance for every side hustle, and simply advertising a service separately does not automatically make it a separate business for tax purposes.
What is a “side hustle”?
A side hustle is a way of earning additional income alongside your main job or business. It is usually a small-scale activity that someone undertakes independently, rather than as part of their normal employment.
In the equestrian world, examples might include:
- A livery yard owner offering horse clipping to clients and other local horse owners.
- Providing services for owners who need an extra pair of hands.
- Offering horse transport as a separate paid service.
- Providing freelance grooming, exercising or holiday cover.
- Hiring out equipment or facilities, where the activity meets the relevant tax rules.
- Selling handmade equestrian products or other goods alongside an existing job.
The key point is that the income comes from an additional service or activity, rather than simply being part of someone’s normal employment.
What is changing, and when?
HMRC has confirmed that the trading allowance will increase from £1,000 to £3,000 from 6 April 2027, covering the 2027/28 tax year onwards. The change is intended to make it easier for individuals to earn modest amounts from small-scale trading or miscellaneous activities, while reducing the administrative burden of reporting that income.
Until then, the existing £1,000 allowance remains in place. It is important not to start treating £3,000 as the current threshold: the new rules do not apply to income earned during the 2026/27 tax year.
The allowance is based on gross income, meaning the total amount received before deducting expenses. It is not £3,000 of profit after costs.
How could this benefit livery yard owners?
Many yard owners already have skills, equipment, facilities and industry contacts that could provide opportunities to earn additional income without necessarily expanding their core livery operation.
For example, a yard owner might decide to offer clipping appointments to horse owners outside their own livery business, provide a horse-catching service locally, or make their horsebox available for paid transport work.
These activities could be developed as additional services, with their own pricing, advertising, bookings and records. That gives customers a clear understanding of what is being offered and helps the yard owner keep track of the income and costs involved.
There is a practical benefit too: a service that might only generate a few hundred pounds a year could help make use of existing skills or equipment and provide a useful additional revenue stream.
Why the distinction between your main business and a side hustle matters
This is an area where it is important to be clear.
A side hustle should be a genuine additional income-generating activity, rather than simply relabelling part of the existing livery business to try to benefit from the allowance.
For example, a yard owner who operates a livery business might also offer clipping to horse owners outside the yard. They could advertise clipping as a separate service, set a standalone price, take individual bookings and keep separate records of the work and income.
That helps demonstrate that the service is being offered independently. However, separate advertising or bookkeeping does not, by itself, determine the tax treatment. HMRC will look at the nature of the activity and the circumstances in which it is carried out. If clipping is simply an additional service supplied as part of the existing livery business, the income may be part of that existing trade.
It is also important to understand that the £3,000 allowance is per individual, not per service or business. Someone offering clipping, transport and freelance grooming cannot claim £3,000 against each activity. Their eligible trading and miscellaneous income is considered together.
For an established sole trader, the allowance is not an extra £3,000 tax-free pot on top of the income from their existing business. The treatment of additional activities needs to be considered alongside the whole trading position.
Does earning less than £3,000 mean you do not have to tell HMRC?
The new allowance is intended to increase the amount of eligible trading income that can be covered by the allowance and raise the Self Assessment reporting threshold for this income to £3,000.
However, it is not a blanket exemption from all tax reporting or business obligations. The current HMRC guidance also explains that the new online reporting arrangements for income between £1,000 and £3,000 are expected to be introduced by 2029. Until then, the existing reporting arrangements continue to apply.
There are also circumstances in which the trading allowance cannot be used, including certain income received from an employer or a connected party. If you already complete a Self Assessment return for another reason, you may still need to include relevant information on that return.
And remember, the allowance does not mean that all income is automatically tax-free. Your overall taxable income, including earnings from employment or your main business, still matters.
Making sure your side hustle is operating legally
The trading allowance relates to tax. It does not remove the other responsibilities that come with providing a service commercially. Before advertising a new service, yard owners should carry out some basic checks to make sure they are operating legally, and check their new activity is covered with their insurers.
Is it worth exploring?
For some yard owners, the increased trading allowance could make small additional activities more attractive, particularly where they already have the skills, experience or equipment to offer a service.
It could also provide an opportunity to make better use of quieter periods, diversify income and offer clients access to services they might otherwise have to source elsewhere.
However, it is important to remember that the allowance is not a licence to operate informally. Tax treatment, insurance, licensing and other legal requirements still need to be considered, and the distinction between a genuine additional trade and an extension of an existing business matters.
The takeaway: the proposed £3,000 trading allowance could offer useful opportunities for yard owners to diversify their income, but it is worth getting the structure right from the outset. Check the rules with HMRC or an accountant, speak to your insurer and make sure any additional service is properly set up before taking bookings.
Thinking about developing an additional service to make the most of the new £3,000 trading allowance, or already offering freelance services from your yard or on a mobile basis? Why not get your service in front of more horse owners through EquiCrew, LiveryList’s new service platform. Whether you offer clipping, horse transport, freelance grooming, exercising or other equestrian services, EquiCrew is designed to help connect service providers with the people looking for them.