Side-Hustles & Tax

Do I need to pay tax on my side-hustle?

Yes, no and maybe.

Any side-hustle which generates you some extra income, may be subject to income tax. HMRC gives everyone a £1,000 tax-free trading allowance each tax year. If your total income from self-employment or “casual income” is £1,000 or less, you don’t need to register with HMRC or pay tax on it.

 But if you earn more than £1,000 from your side hustle, you may need to register for Self Assessment, report your income, and pay any tax due.

 

What counts as a side hustle?

A side hustle is any activity you do to earn money outside of your main job. This could include:  

  • Selling goods online (e.g. eBay, Etsy, Vinted)

  • Freelance work (writing, graphic design, web development)

  • Services (cleaning, babysitting, tutoring, dog walking)

  • Making and selling things (cakes, crafts, clothing)

  • Renting out equipment or property (AirBnB)

If you're getting paid, HMRC might consider it taxable — even if it’s just a hobby or something you do occasionally.

 

What if I’m just selling unwanted items?

Good news — if you're just selling your personal items (e.g. old clothes, furniture or gadgets) and you’re not seeking to make a profit, it’s not usually taxable.

 

How do I know if I’m “trading”?

HMRC uses something called the “badges of trade” — a list of factors that help decide if you’re trading. Some of these include:

  • Are you making things to sell?

  • Are you buying goods to resell at a profit?

  • Are you doing it regularly?

  • Do you advertise or promote what you do?

  • Do you intend to make a profit?

If you answer "yes" to several of these, you’re probably trading — and may need to register as self-employed.

 

I’ve earned more than £1,000 — what now?

If your income from your side hustle is over the £1,000 allowance (before expenses), you’ll need to:

  1. Register for Self Assessment with HMRC

  2. Keep records of your income and expenses

  3. File a tax return each year and pay any tax and National Insurance due

If you need any advise regarding tax and your side-hustle, please do get in touch with us.