Side Hustle Tax: When Do You Need to Tell HMRC?

Making some extra money on the side?

Perhaps you freelance alongside your job, sell things online, tutor, dog walk, create content, make products or do occasional consultancy.

One of the most common questions is:

When does my side hustle become something I need to tell HMRC about?

The first thing to understand is that these are three different things:

Making extra money. Telling HMRC. Paying tax.

One doesn’t automatically mean all three.

Here’s a simple way to work out what you need to do.

1. First, Is It Actually a Side Hustle?

Ask yourself:

Am I selling my own unwanted things, or am I doing it to make money?

Selling your own things?

Old clothes, toys, furniture or things you bought for yourself and no longer want.

➡️ You can usually stop here. That isn’t normally trading income.

There can be other tax considerations for valuable personal possessions, but simply clearing out your wardrobe doesn’t normally make you a trader.

Doing it to make money?

Buying or making things to sell for a profit, or providing a service for payment?

➡️ Keep going — now you need to add up what you’ve earned.

HMRC says you’re likely to be trading if, for example, you regularly sell to make a profit, make things to sell for profit or are paid for providing a service.

2. Add Up What Came In

If you are trading, the next question is:

How much did you actually receive during the tax year?

Check your bank account, PayPal, Stripe, Etsy or wherever else you were paid. Don’t forget cash.

And importantly:

Don’t take off your expenses yet.

The £1,000 trading allowance looks at your gross trading income — before expenses.

For example, if customers paid you £1,500 and you spent £800 earning it, your gross trading income is still £1,500, not your £700 profit.

3. Now Check Your £1,000

Once you know your total:

£1,000 or less?

You generally don’t need to tell HMRC about that trading income, provided you qualify for the trading allowance.

➡️ You can usually stop here.

You should still keep records of the income. There are also circumstances where you may need or choose to complete a tax return despite being within the £1,000 allowance, so check if you’re unsure.

More than £1,000?

You’ll need to tell HMRC about your trading income. If you’re not already registered, this will generally mean registering for Self Assessment as a sole trader.

➡️ Don’t wait until you’re ready to submit the tax return before dealing with the registration.

The 5 October Self Assessment Deadline

If your gross trading income exceeds £1,000 and you need to register for Self Assessment, the registration deadline is normally 5 October following the end of the relevant tax year.

So, for a side hustle started during 2025/26, the date to have on your radar is:

5 October 2026.

This isn’t the deadline for submitting your online tax return. It’s about making sure HMRC knows you need to be within Self Assessment.

Not sure whether you need to tell HMRC? There is an official checker:

⁠Check if you need to tell HMRC about additional income

Does Being Over £1,000 Mean You’ll Pay Tax?

Not necessarily.

£1,000 is an important reporting threshold, but it isn’t a simple “anything above this gets taxed” rule.

Once your gross trading income is above £1,000, you may be able to deduct the trading allowance when calculating your taxable trading income, or claim your actual allowable expenses instead. You can’t generally claim both against the same income.

Your wider income and circumstances will also affect the amount of tax you ultimately pay.

That’s why I’d separate the questions:

Do I need to tell HMRC?

Then:

How much tax will I actually owe?

What About Vinted, eBay and Other Online Platforms?

Selling through an online platform doesn’t automatically mean you have a taxable side hustle.

If you’re simply selling your own unwanted belongings, that’s very different from buying or making things specifically to sell for profit.

However, digital platforms can be required to collect seller information and report details to HMRC. A platform reporting information about you does not automatically mean you owe tax.

So don’t panic about what HMRC might see.

Know what you’re doing, keep your own records and make sure you’ve declared anything that needs declaring.

Side Hustle Growing? It Might Be Time for an Accountant

Side hustles have a habit of starting small.

A few jobs here. A few sales there. Then suddenly you’re keeping records, thinking about expenses and wondering whether you need a tax return.

That’s often the point where having someone else take care of the accounts and tax becomes worthwhile.

Blackdown Accounting helps sole traders in Sidmouth and across East Devon with year-end accounts and Self Assessment tax returns.

And if you already have an accountant but are thinking about moving to a new accountant, we can help make the change straightforward too.

If you’d rather concentrate on earning the money and have someone else deal with the year-end accounts and tax return, get in touch with Blackdown Accounting.