Many people start an activity as a hobby, perhaps selling handmade goods online, offering occasional services, or generating small amounts of additional income from spare capacity. Over time, what begins as a leisure pursuit can evolve into something that looks increasingly commercial. This raises an important question, when does a hobby become a business for tax purposes?

HMRC does not rely on a single test. Instead, it considers a number of indicators commonly referred to as the badges of trade. These are established principles derived from case law and used to assess whether an activity amounts to trading rather than a private pastime.

One important factor is profit motive. A genuine intention to make a profit suggests the activity is more likely to be treated as a business. Occasional sales at a loss may not prevent trading status, but consistent attempts to generate surplus income may indicate commercial intent.

Frequency and repetition are also relevant. Selling items regularly, particularly where the activity is organised and ongoing, suggests a trading activity rather than the disposal of personal possessions. A one off sale is unlikely to be regarded as trading, but repeated transactions may indicate business behaviour.

The nature of the asset can also provide insight. Items acquired specifically for resale, or goods that are produced with the intention of selling at a profit, are more likely to fall within the definition of trading. By contrast, selling unwanted personal items is less likely to attract tax consequences.

The way the activity is organised can also be important. Keeping records, maintaining a website, marketing products or services, or investing in equipment may indicate a structured commercial approach. These factors often demonstrate that the activity is being conducted in a business-like manner.

Another consideration is the length of ownership. Assets held for a short period before resale may indicate trading, whereas items owned for personal enjoyment over a longer period may not.

Where activities begin to generate regular income, it is sensible to review whether registration for Self-Assessment may be required. Expenses incurred wholly and exclusively for business purposes may become deductible, but income will also become taxable.

For many individuals, the transition from hobby to business happens gradually. Early awareness of the badges of trade can help avoid unexpected tax liabilities and ensure that appropriate records are maintained from the outset.

If you are unsure whether your activity may be regarded as trading, a review can help clarify your position and identify any planning opportunities.

Recent global instability, particularly tensions affecting oil and energy supply chains, has increased concerns about price gouging, where businesses take advantage of shortages or uncertainty to impose unjustified price increases. In response, the UK government has announced new measures intended to protect consumers and ensure markets continue to operate fairly.

Price gouging generally occurs when businesses increase prices significantly beyond what can reasonably be justified by increases in underlying costs. This behaviour often becomes more visible during periods of crisis, when supply chains are disrupted, demand becomes volatile, and consumers have limited alternatives. Energy markets are particularly sensitive to global events, as oil and gas prices can react rapidly to geopolitical developments.

In March 2026, the Chancellor set out plans to introduce an anti-profiteering framework aimed at ensuring regulators can act more quickly where unfair pricing practices are suspected. The government has indicated that the Competition and Markets Authority may receive targeted, time limited powers to investigate and address excessive price increases if evidence of price manipulation emerges.

The measures are designed to address concerns that businesses may attempt to exploit uncertainty linked to conflict in the Middle East and resulting pressures on energy and fuel prices. The government has emphasised that it will not hesitate to intervene where pricing behaviour appears inconsistent with normal competitive market conditions.

Alongside regulatory action, the government is also considering structural measures to improve long term price stability. These include accelerating investment in domestic energy generation, particularly nuclear power, and reviewing import tariffs on selected goods to reduce pressure on household budgets. Improving energy security is intended to reduce reliance on volatile global markets and limit the risk of sudden price spikes in future years.

Regulators are already increasing monitoring of fuel and heating oil markets, with enforcement action expected where breaches of consumer protection law are identified. Increased transparency in pricing is expected to play an important role in discouraging opportunistic behaviour by suppliers.

For businesses, the key message is that pricing strategies should remain commercially justifiable and capable of explanation if challenged. Sudden increases in margin during periods of market stress may attract regulatory scrutiny, particularly where customers appear to have limited alternatives.

For consumers, the proposed framework provides reassurance that the government intends to take action where markets fail to operate competitively. Over time, improved energy security and more active regulatory oversight may help reduce the frequency and severity of price shocks affecting households and businesses.

1 April 2026 – Due date for corporation tax due for the year ended 30 June 2025.

19 April 2026 – PAYE and NIC deductions due for month ended 5 April 2026 (If you pay your tax electronically the due date is 22 April 2026).

19 April 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 April 2026.

19 April 2026 – CIS tax deducted for the month ended 5 April 2026 is payable by today.

30 April 2026 – 2024-25 tax returns filed after this date will be subject to an additional £10 per day late filing penalty for a maximum of 90 days.

1 May 2026 – Due date for corporation tax due for the year ended 30 July 2025.

19 May 2026 – PAYE and NIC deductions due for month ended 5 May 2026. (If you pay your tax electronically the due date is 22 May 2026).

19 May 2026 – Filing deadline for the CIS300 monthly return for the month ended 5 May 2026.

19 May 2026 – CIS tax deducted for the month ended 5 May 2026 is payable by today.

31 May 2026 – Ensure all employees have been given their P60s for the 2025/26 tax year.

If you have not yet checked whether you need to use Making Tax Digital (MTD) for Income Tax, now is the time to urgently see if you are affected. The Income Tax reporting requirements for some self-employed individuals and landlords will change significantly from 6 April 2026. MTD for Income Tax changes the traditional annual self-assessment process to a new digital record-keeping and quarterly updates process submitted through recognised software.

From April 2026, those with qualifying income over £50,000 will be required to maintain digital records and submit quarterly updates of trading or property income and expenses. From April 2027, the threshold will reduce to £30,000, and in April 2028 it will further reduce to £20,000. 

A full tax return will still be required by the following 31 January after the tax year i.e. the first MTD for Income Tax return, covering the 2026-27 tax year, will be due by 31 January 2028.

MTD aims to reduce errors, improve efficiency, and support business productivity. HMRC estimates that around 860,000 taxpayers will join in 2026, with more joining in 2027. 

The system also provides exemptions for those unable to go digital and offers accessible software solutions. Taxpayers joining MTD for Income Tax in April 2026 will not receive penalty points for late quarterly updates for the first 12 months. This will allow them time to adapt to the new system.

A Companies House blunder has raised concerns after a flaw in the WebFiling service briefly exposed sensitive company data. The issue, identified on 13 March 2026, meant that a logged-in user could potentially access and amend limited details of another company by carrying out a specific sequence of actions.

Companies House has stated that this system vulnerability was not available to the general public. Only users with authorised access codes who were already logged into the system could have exploited it. Nevertheless, the nature of the flaw meant that certain private information, such as dates of birth, residential addresses and company email addresses may have been visible. There was also a risk that unauthorised filings, including accounts and changes to director details, could have been submitted on another company’s record.

After identifying this issue, Companies House shut down the WebFiling service at 13:30 on 13 March to investigate. Following independent testing, the system was restored at 09:00 on 16 March. Companies House has said that passwords and identity verification data were not compromised, and that existing filed documents, such as accounts or confirmation statements, could not be altered.

The issue is believed to have arisen from a WebFiling systems update in October 2025. It has been reported to both the Information Commissioner’s Office and the National Cyber Security Centre.

Companies are now being urged to review their registered details and filing history carefully. While no confirmed misuse has been reported so far, Companies House is continuing to investigate. If a company has a concern, it should raise a complaint via the Companies House complaints page at www.gov.uk/government/organisations/companies-house/about/complaints-procedure and include evidence to describe the issue.