Side hustle tax: the £1,000 allowance and when to tell HMRC

Side hustle tax is simpler than it sounds. If you earn a bit extra from dog walking, tutoring, delivery work or selling crafts online, HMRC lets most people make £1,000 a year before they need to tell it anything. Go over that, and you'll usually need to register for Self Assessment. This guide explains the allowance, the deadlines and the digital platform reporting rules that started in 2024, using HMRC's own guidance.

By the Business Account Review editorial team · checked 25 October 2026 · How we check

Hobby, selling up or side hustle?

The first side hustle tax question is whether you're trading at all. Clearing out your loft is not the same as running a small business.

Usually not taxed as trading

Selling your own unwanted things, such as old clothes, furniture or the contents of a garage. HMRC says you're unlikely to pay tax if you sell personal items from your home.

Usually trading

Buying or making things in order to sell them at a profit, or being paid for a service such as tutoring, dog walking, cleaning or delivery driving. HMRC says if you buy or make goods to sell at a profit, you're likely to be trading.

Grey areas exist in side hustle tax. If you're not sure which side you're on, HMRC's free additional income checker asks a few questions and tells you whether you need to report anything.

The £1,000 trading allowance and side hustle tax

The trading allowance is the heart of side hustle tax in the UK. GOV.UK says you can get up to £1,000 each tax year tax-free from trading, including casual services such as babysitting or gardening and hiring out personal equipment such as power tools.

Some side hustle tax points that catch people out:

It's one allowance, not one per hustle. HMRC's side hustle guidance says you have a single £1,000 allowance each tax year, and income from all your side hustles counts towards it.
It's based on income, not profit. The £1,000 is measured against what you take in before costs.
Allowance or expenses, not both. If your income is over £1,000, you can deduct the £1,000 allowance instead of your actual expenses. If your expenses are higher, claiming them may work out better. You can't do both.
It doesn't always apply. GOV.UK says you can't use it for income from a company you or a connected person own or control, from a partnership you're in, or from your employer or your spouse's or civil partner's employer.
Property is separate. There's a separate £1,000 property allowance for income from land or property.

HMRC's own side hustle tax example helps. Someone earns £500 from delivery driving and £800 from selling crafts in a tax year. That's £1,300 in total, which is over the allowance, so they need to do a tax return. HMRC says they only pay Income Tax on the amount above their £1,000 allowance. The full rules are on the GOV.UK trading and property allowances page.

When you need to tell HMRC about side hustle tax

The tax year runs from 6 April to 5 April. Side hustle tax works on that year, not the calendar year.

Side hustle tax: when HMRC needs to know (GOV.UK, checked 25 October 2026)
Your trading income in the tax year	What GOV.UK says
£1,000 or less	You generally don't need to tell HMRC, unless an exception applies. Keep records anyway.
Over £1,000	Register for Self Assessment by 5 October after the end of that tax year
Any amount, with a loss you want relief on	You must register, even if income is under £1,000

After you register, you file a return and pay any side hustle tax due. For the 2025 to 2026 tax year, GOV.UK gives these deadlines: 31 October 2026 for paper returns, and 31 January 2027 for online returns and paying any tax owed. Miss them and penalties can apply. See the Self Assessment deadlines.

HMRC's side hustle campaign site also says a new online way to report income is planned by 2029 for people earning between £1,000 and £3,000. Until then, Self Assessment is how you tell HMRC.

What online platforms report about your side hustle

New rules started in the UK on 1 January 2024. Digital platforms, such as online marketplaces and apps for selling goods or services, may now collect details about sellers and report what they earned to HMRC. These rules have made side hustle tax a much bigger talking point.

Yearly reports

Platforms report each calendar year's information to HMRC by the following January. Information for 2024 was due by 31 January 2025.

A copy for you

The platform must give you a copy of what it reported, showing your earnings minus fees, commission or taxes it took, split into quarters.

Small sellers excluded

GOV.UK says reporting doesn't apply if you make fewer than 30 sales of goods in a calendar year and receive less than 2,000 euros (about £1,700) for them.

Not a tax bill

GOV.UK says a platform reporting your details "does not automatically mean you owe tax". Whether you owe side hustle tax depends on whether you're trading and how much you earn.

One timing trap: platforms report by calendar year, but side hustle tax runs on the 6 April to 5 April tax year. GOV.UK reminds sellers to work out income for the tax year themselves. Read selling goods or services on a digital platform for details.

A side hustle tax year, step by step

1
6 April: a new tax year starts
Start a fresh record of everything you earn and spend on the hustle.
2
During the year: watch the total
Add up income across every hustle and platform. Once it passes £1,000, side hustle tax applies and you'll need to register.
3
5 April: the year ends
Total your income and expenses, and decide whether the allowance or actual expenses suits you better.
4
By 5 October: register
If you're over £1,000 and haven't filed before, register for Self Assessment. HMRC sends you a Unique Taxpayer Reference.
5
By 31 January: file and pay
Submit your online return and pay what you owe. If you can't pay in full, HMRC says you may be able to set up a payment plan.

If your hustle is growing into a proper business, our guide to registering as self-employed covers the next steps, and how to start a business looks at the bigger picture.

Staying organised for side hustle tax

Good records make side hustle tax far less stressful, even if you stay under £1,000. GOV.UK says you should keep records when you use the allowance.

Keep side hustle money out of your everyday account, so income is easy to total.
Download your platform statements and the yearly report they send you.
Keep receipts for materials, postage, fuel and equipment.
Note cash payments the day you receive them.
Set aside part of each payment for any side hustle tax you may owe.
Diary 5 October and 31 January.
Check the HMRC income checker once a year.

You don't legally need a business account for a sole trader side hustle, but many people find a separate one helps. Our guide to whether sole traders need a business bank account explains the rules. If you decide to open one, compare business bank accounts, including free plans. Tide, for example, has a £0 Free plan for sole traders.

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Side hustle tax terms

Trading allowance: The £1,000 a year of trading income you can receive tax-free, or deduct instead of expenses.
Self Assessment: HMRC's system for reporting income that isn't taxed at source, through a yearly tax return.
UTR: Your Unique Taxpayer Reference, sent by HMRC when you register.
Tax year: 6 April to 5 April. All side hustle tax deadlines work from this.
Digital platform: A website or app that connects sellers with buyers, such as an online marketplace or a gig-work app.

This guide explains the rules; it isn't tax advice. If your situation is complicated, speak to an accountant.

Side hustle tax FAQs

How much can I earn from a side hustle before paying tax?

Most people can earn £1,000 of trading income a year tax-free under the trading allowance. Above that, you'll usually need to register for Self Assessment.

Is the £1,000 allowance per side hustle?

No. HMRC says it's a single allowance covering all your side hustles in the tax year.

Do I pay tax on selling old clothes online?

Usually not. HMRC says you're unlikely to pay tax on selling personal items. Buying things to resell for profit is different.

Does a platform report mean I owe side hustle tax?

No. GOV.UK says it doesn't automatically mean you owe tax. Check whether you're trading and over the allowance.

When is the deadline to register?

By 5 October after the end of the tax year in which your trading income went over £1,000.

Sources

GOV.UK: Tax-free allowances on property and trading income
GOV.UK: Selling goods or services on a digital platform
GOV.UK: Self Assessment deadlines
GOV.UK: Check if you need to tell HMRC about additional income
HMRC: Tax Help for Hustles and Tax Confident campaign pages
All sources checked 25 October 2026.