Millions of Britons struggling with the rising cost of living are falling into a hidden 'tax trap' as they take on side hustles to make ends meet, experts have warned. Fresh data reveals that one in four UK adults now supplements their income through activities such as selling unwanted goods online, taking second jobs, or running small enterprises. The trend is pumping approximately £8.5 billion into the UK economy each month, according to research by ecommerce marketing platform Omnisend.
Side Hustles Driven by Necessity
The study found that 25% of UK adults now have an additional income source, with over half stating they began doing so to cover essential bills and groceries. However, most are not earning large sums. Roughly two-thirds of those with side hustles bring in £500 or less per month after expenses, with many earning under £100. Marty Bauer, ecommerce expert at Omnisend, said: 'For a lot of people, side hustles are no longer about turning a hobby into a business. They are about making ends meet. An extra £100 or £200 a month might not sound life-changing, but when food, fuel, rent and bills are all competing for the same income, it can be the difference between falling short and getting through the month.'
Mortgage and Tax Implications
Mortgage specialists report a surge in applicants relying on multiple income streams. Rohit Kohli, director at The Mortgage Stop, told Newspage: 'Two or three years ago, maybe two in 10 clients had an extra income stream. Now it feels closer to half. It tells you normal wages are not keeping pace with real life.' However, Hannah Vandervennin, mortgage adviser at The Mortgage Consultancy, warned that lenders often exclude side hustle earnings from affordability assessments, as underwriting is built around predictable salaried employment.
Tax and finance experts also caution that many people may be unaware that supplementary income can attract HMRC scrutiny. Under current rules, Brits can earn up to £1,000 annually from trading before needing to declare it under the Trading Allowance. Kate Underwood, founder of Kate Underwood HR and Training, noted: 'HMRC pulls data directly from eBay and Vinted now so flying under the radar isn't the option it once was.' Michelle Lawson, director at Lawson Financial, added: 'The UK has some of the longest working hours in Europe, the most expensive bills and the least rewards.'
Mitali Deypurkaystha, author and AI strategist at Impact Icon AI, suggested the figures highlight a loss of leisure time, stating: 'That should ring alarm bells about the death of downtime in modern Britain. Side hustles used to be about extra holidays or pursuing a passion project, but for millions, they now fund food bills, rent and heating.'
