I've got a side hustle - do I need to register with HMRC?
If you're earning money outside of employment, there are rules about when and how you need to tell HMRC. Here's what you need to know.
FAQ
If you earn more than £1,000 from a side hustle in a tax year, you'll need to register for Self Assessment and declare it.
Selling things online, doing some freelance work on evenings and weekends, offering a service, renting out a spare room. Side hustles come in all shapes and sizes.
What many people don't realise is that once you cross a certain income threshold, HMRC needs to know about it.
The good news is the rules are fairly straightforward. The less good news is that a lot of people don't find out about them until after the fact.
HMRC gives everyone a £1,000 tax-free allowance for trading income each tax year. This is called the Trading Allowance.
If your side hustle earns you less than £1,000 in a tax year (before expenses), you don't need to do anything. You don't need to register, you don't need to declare it, and you don't owe any tax on it.
Once you go over £1,000, the rules change.
It's worth being clear: the £1,000 is based on your income, not your profit. So if you earned £1,200 selling things online but spent £400 on materials, your income is still £1,200 - not £800.
Trading income is money you receive for selling goods or providing a service. It includes things like:
It does not include things like selling your own personal possessions occasionally (clearing out old clothes, for example) - although if it starts to look like a regular trading activity, HMRC may see it differently.
There's a separate £1,000 allowance for property income too, if you're renting out a room or a property.
You'll need to register for Self Assessment with HMRC, and complete a tax return for the relevant tax year.
The UK tax year runs from 6th April to 5th April. So if your side hustle earns over £1,000 between 6th April 2024 and 5th April 2025, you'll need to file a Self Assessment return for that year, with a deadline of 31st January 2026 for online submissions.
If you're already in employment, your tax is handled through PAYE - but any additional income from self-employment still needs to be declared separately via Self Assessment.
You can register for Self Assessment on GOV.UK. You'll need a Government Gateway account to do this.
It's worth registering early. HMRC can take a few weeks to send you your Unique Taxpayer Reference (UTR), which you'll need to file your return.
The deadline to register is 5th October following the end of the tax year in which you started earning. So for income earned in the 2024/2025 tax year, you'd need to register by 5th October 2025.
Once you've registered and filed your return, HMRC will calculate what you owe.
You can either:
You'll only pay tax on income above your personal allowance (currently £12,570 for most people in 2024/25). If your side hustle income is modest and your total income stays below that threshold, your tax bill may be very small or nothing at all.
You may also need to pay Class 4 National Insurance if your profits are above £12,570, and potentially Class 2 National Insurance too - though the rules on this changed from April 2024.
Don't ignore it.
HMRC do notice, and penalties for late registration or late filing can add up. But if you come forward voluntarily, and haven't been deliberately evasive, they are generally reasonable. Getting it sorted late is considerably better than not getting it sorted at all.
Keep records. Even if your income is below the threshold, it's worth keeping a simple record of what you're earning, just in case you approach the limit, or HMRC has questions.
Expenses matter. If your costs are significant, deducting actual expenses rather than claiming the £1,000 allowance might reduce your tax bill. An accountant can help you work out which is better.
Side hustle to main hustle. If your side income is growing and starting to look more like a business, it's worth thinking about whether you should register as a sole trader formally, and get proper accounting set up.
If your side hustle earns you more than £1,000 in a tax year, you need to register for Self Assessment and declare your income. Register by 5th October following the end of the tax year, and file your return by 31st January. If you're unsure, speaking to an accountant is always worthwhile.
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