HM Revenue and Customs (HMRC) has issued a reminder to workers across the UK who earn extra income from a side hustle. If you have earned more than £1,000 from such activities, you may need to file a Self Assessment tax return or risk a penalty.
Who Needs to File?
In a post on social media platform X, HMRC urged people to check whether they need to complete a tax return. The requirement applies to individuals who have made over £1,000 through a side hustle, as well as those who are newly self-employed, landlords, or new partners in a business partnership.
HMRC stated: "Unsure if you might need to complete a tax return? You may need to if you're: Newly self-employed, a landlord, a new partner in a business partnership, or earned more than £1,000 through a side hustle. Check using our free online tool."
Understanding the Rules
The Government website explains that income tax is usually automatically deducted from wages and pensions. However, individuals and businesses with additional income must report it through a Self Assessment tax return.
GOV.UK states: "If you need to send a Self Assessment tax return, fill it in after the end of the tax year (5 April) it applies to. You must send a return if HMRC asks you to. You may have to pay interest and a penalty if you do not file and pay on time."
Key Deadlines
There are strict deadlines for tax returns. You must notify HMRC by October 5 if you need to file a return for the previous tax year and you have either not submitted a return before, or you were registered previously but not required to file for the 2024 to 2025 tax year.
Failing to notify HMRC by October 5 could result in a penalty. To complete your return accurately, it is essential to keep records such as bank statements and receipts.
Payment Deadlines
Different deadlines apply for settling your tax bill. The key dates are:
- January 31 – for any tax owed for the previous tax year (balancing payment) and your first payment on account.
- July 31 – for your second payment on account.
Calculating Your Tax
HMRC will calculate what you owe based on the information you provide. The amount of tax you pay depends on your Income Tax band. A separate rate applies for Capital Gains Tax if you are liable, for example, if you sell shares or a second property.
Additional guidance on completing your return is available online.
