Question 1

Do I need to pay tax on my side hustle income in the UK?

Accepted Answer

If your gross side hustle income is £1,000 or less per tax year, it's covered by the trading allowance and you owe no tax. If it exceeds £1,000, you must register for Self Assessment and pay income tax and Class 4 National Insurance on your profits.

Question 2

What is the £1,000 trading allowance?

Accepted Answer

The trading allowance lets you earn up to £1,000 from self-employment or casual trading without paying tax or registering for Self Assessment. If your income exceeds £1,000, you can either deduct the £1,000 allowance or your actual business expenses — whichever is higher — but not both.

Question 3

Do I need to register for Self Assessment for my side hustle?

Accepted Answer

Yes, if your side hustle income exceeds £1,000 in the tax year. You must register with HMRC for Self Assessment by 5 October following the end of the tax year (e.g., by 5 October 2027 for 2026/27 income).

Question 4

Do platforms like eBay, Vinted and Airbnb report my earnings to HMRC?

Accepted Answer

Yes. Since January 2024, digital platforms are required to report seller earnings to HMRC. If you've made 30 or more sales or earned over €2,000 in a year, HMRC already has your data.

Question 5

What expenses can I deduct from my side hustle income?

Accepted Answer

Common deductible expenses include postage and packaging, raw materials, platform fees, mileage, home office costs, and professional subscriptions. You can claim actual expenses or the £1,000 trading allowance — whichever gives a bigger deduction — but not both.

SideHustleTax