HM Revenue and Customs (HMRC) has issued a fresh reminder to anyone with a side hustle: if your total gross income from such activities exceeds £1,000 in a tax year, you must tell HMRC and check whether you need to pay tax.
The reminder, shared on Monday, October 26, covers key tax responsibilities for people running small businesses alongside their main job. The £1,000 figure is known as the trading allowance, and it applies to all your side hustle income combined, not each activity separately.
What counts as a side hustle?
A side hustle is any extra income earned outside your main job. Many side hustles begin as hobbies, such as making and selling crafts, kids' clothing or accessories; offering services like childminding, photography, beauty treatments, dog walking, tutoring, or fitness classes; and content creation and influencing, such as posting parenting or lifestyle content on social media.
A hobby becomes a side hustle once you are regularly selling for payment rather than making things as gifts. If your income from this exceeds £1,000 in a tax year, whether alone or combined with other side hustles, you need to let HMRC know.
Combining income and selling used items
All your side hustle income counts towards the £1,000 threshold combined. For example, earning £600 from selling handmade items and £500 from tutoring in a tax year totals £1,100, meaning you would need to inform HMRC.
Selling your own unwanted personal belongings, such as decluttering a wardrobe or passing on outgrown kids' items, usually does not count as trading and does not need to be reported. The key difference is intention and regularity: if you are regularly buying or making things specifically to sell for profit, or providing a service for payment, that is likely to count as trading.
Key dates and what to do if you stop
For the 2025 to 2026 tax year, the deadline for submitting online Self Assessment tax returns and paying any tax due is 31 January 2027. If you earned more than £1,000 from a side hustle in 2025/26 and have not previously needed to register for Self Assessment, you should register with HMRC as soon as possible. If you started your side hustle in the 2026 to 2027 tax year, you will need to register from 6 April 2027.
Missing the deadline may lead to penalties, so it is important to register, submit your tax return, and pay any tax owed on time. If you no longer need to file a Self Assessment return because you have stopped trading, sold your business, retired, or ceased self-employment for another reason, you should tell HMRC as soon as possible to avoid a late-filing penalty, even if you have no tax to pay. HMRC will not automatically know if your circumstances have changed.
