Side hustle tax in the UK, explained

From reselling and crafting to tutoring and freelance gigs, a side hustle can be a brilliant way to earn extra money — and the tax rules are more generous than many people think. The key is knowing when your side income becomes taxable and when you must tell HMRC. This page explains it plainly, and our free checker gives you a personal answer in about a minute.

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Do I need to tell HMRC?

The £1,000 allowance is your friend

Most side hustles count as trading, so the trading allowance applies: the first £1,000 of your gross side income each tax year is tax-free. If you earn £1,000 or less from your side hustle in a tax year, you usually do not need to register for Self Assessment or declare it.

When you must register for Self Assessment

Once your gross side-hustle income passes £1,000 in a tax year, you generally need to register for Self Assessment by 5 October after the tax year, then file a return. You pay tax on profit (income minus allowable expenses), not on turnover, and the rate depends on your total income from all sources.

Combine all your side income

The £1,000 allowance covers all of your trading income combined. If you resell on one platform, knit items to sell on another, and do some freelance work, those all add together against the single allowance. Keeping one simple record of all side income makes tax time straightforward.

Expenses you can claim

If you are over the allowance and file a return, you can deduct genuine business costs — materials, platform fees, postage, software, and a reasonable share of home or mobile costs if you work from home. Good records from day one save stress later and ensure you only pay tax on true profit.

Frequently asked questions

Do I pay tax on my side hustle?
Only on profit above the £1,000 trading allowance. If your gross side income is £1,000 or less for the tax year you usually owe nothing and do not need to report it.
When do I have to register for Self Assessment?
Typically once your side-hustle trading income exceeds £1,000 in a tax year. Register by 5 October after the tax year ends, then file your return by the usual deadlines.
Can I have a job and a side hustle?
Yes. Employment and self-employment are separate. Your side hustle profits are taxed alongside your other income, and the £1,000 allowance still applies to your trading income.
What side-hustle expenses can I claim?
Genuine business costs such as materials, marketplace and payment fees, postage, software, and a fair share of home running costs. Keep receipts and a simple income/expense record.
Does the allowance apply to each platform separately?
No. It is one £1,000 allowance across all of your trading income combined, no matter how many platforms or activities you use.

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