Millions of Britons with side hustles are at risk of falling into a tax trap as the cost of living crisis forces more people to seek additional income. New research shows that one in four UK adults now has a secondary source of earnings, with many selling goods online or taking on extra jobs to cover essentials like food, rent and bills.
According to a study by ecommerce marketing platform Omnisend, side hustles are injecting around £8.5 billion into the UK economy each month. However, the majority of earners are not making large sums, with roughly two-thirds bringing in £500 or less per month after expenses, and many earning under £100. Experts say the trend highlights the severe strain on household finances.
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 specialists report a sharp increase in applicants relying on multiple income streams. Rohit Kohli, director at The Mortgage Stop, said: 'Two or three years ago, maybe two in 10 clients had an extra income stream. Now it feels closer to half.' However, Hannah Vandervennin, mortgage adviser at The Mortgage Consultancy, warned that lenders often exclude such earnings from affordability assessments, as their underwriting is based on predictable salaried employment.
Tax experts caution that many people may be unaware of their obligations to HMRC. Under current rules, Brits can earn up to £1,000 a year from trading before needing to declare it under the Trading Allowance. But 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 rising costs of living and general household financial pressures are pushing more people to extra work or additional income streams. The UK has some of the longest working hours in Europe, the most expensive bills and the least rewards.' The findings have prompted concerns about the 'death of downtime' in modern Britain, as side hustles shift from discretionary extras to necessities for survival.
