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Whether it’s selling on Vinted, freelancing after work, walking dogs at weekends or making money through TikTok, side hustles have become a normal part of life for millions across the UK. Turning a hobby that you’re good at into a second income is a savvy way of earning more money whilst enjoying your skill.
With rising living costs impacting everyone, it’s easy to see why more and more people have a side hustle.
But there’s one question we hear all the time: “Do I actually need to tell HMRC about my side hustle?” The short answer is sometimes.
The longer answer is, this all depends on what type of side hustle you have, how much you earn, and whether HMRC considers it a hobby, casual income, or a business. At Gorilla Accounting, we can support you with any tax queries you might have when it comes to multiple income streams.
What Counts as a Side Hustle?
A ‘side hustle’ is essentially any extra income you earn outside your main employment. HMRC usually classes this as either ‘trading income’, ‘property income’, or ‘miscellaneous income’.
Common side hustles include things like:
- Freelance writing, design, marketing or coding
- Selling handmade products on platforms like Etsy
- Reselling items on eBay or Vinted
- Food delivery driving
- Taxi driving for Uber
- Tutoring
- Social media influencing
- Renting out a spare room
- Airbnb hosting
- Dog walking or pet sitting
- Photography
- Consulting or coaching
The key thing HMRC looks at is intent. If you’re regularly earning money and doing it to make a profit, they’ll usually class it as taxable.
If you’re simply selling old clothes from your wardrobe at a loss, that’s generally not considered trading. HMRC has specific guidance for online sellers to help work this out.
The £1,000 Rule: How Much Can You Earn Tax-Free?
This is where the Trading Allowance comes in. In the UK, you can earn up to £1,000 per tax year from self-employment or casual trading without needing to tell HMRC or pay tax. The allowance remains in place for the 2026/27 tax year.
That means if your side hustle brings in:
- £0 – £1,000 (gross income) – usually no tax to pay and no need to register
- Over £1,000 (gross income) – you’ll need to register for Self-Assessment
This figure is based on income, not profit. If you make £1,200 selling handmade candles but spent £800 making them, you’ve still gone over the threshold and need to tell HMRC.
Different Side Hustles and Their Tax Rules
Not all side hustles are taxed in exactly the same way.
Selling Online (eBay, Vinted or Etsy)
If you are selling personal belongings, it is usually not taxable. However, if you are buying products to resell for profit, this is classed as trading.
Since 2024, online platforms have been sharing seller data with HMRC, making it easier for them to spot undeclared income.
Freelancing
Freelance income is one of the most straightforward taxable side hustles. Whether you’re a copywriter, web designer, consultant or virtual assistant, anything over the £1,000 trading allowance needs declaring.
However, you can claim allowable expenses like software, internet costs and equipment.
Delivery Driving
Working for apps like Deliveroo, Uber Eats or Just Eat counts as self-employment. This means you should do the following to reduce your taxable profit:
- Track your mileage
- Keep fuel receipts
- Record insurance costs and save maintenance records
Content Creation & Influencing
This type of side hustle can be difficult to navigate because there are situations that can catch you out. HMRC doesn’t just count cash when it comes to being a social media influencer.
Free products, gifted services and sponsorships can all count as income if they’re given in exchange for promotion.
Tutoring
Private tutoring is taxable as self-employed income. This applies whether you tutor online or in person. Expenses might include teaching materials, software subscriptions or travel costs.
Renting Out Property
This works differently. If you rent out a spare room in your home, you may qualify for the Rent a Room Scheme, which lets you earn up to £7,500 tax-free. If you share the income with a partner or co-owner, the limit is halved to £3,750 each.
If you rent out a full property or holiday let, separate property income rules apply.
There’s also a Property Allowance of £1,000 for smaller property income streams.
How Much Tax Will You Pay?
Going over £1,000 doesn’t automatically mean you’ll owe tax. Your tax bill depends on your profit and your total income for the year. For most people, side hustle profits are added on top of their salary.
That means:
- If your total income stays within your Personal Allowance (£12,570), you may pay no income tax
- If it goes over, you’ll pay at your usual tax band (20%, 40% or 45%)
You may also need to pay National Insurance, depending on your profit levels.
This is where tax planning becomes important, because claiming the right expenses can make a big difference.
How to Tell HMRC About Side Hustle Income
If you earn more than £1,000, you’ll usually need to register for Self-Assessment. This is how HMRC collects tax on untaxed income.
Step 1: Register as Self-Employed
Go to the HMRC website and register for Self-Assessment. You’ll need to do this by 5th October after the end of the tax year where you went over the threshold.
For example, if you earned over £1,000 between 6th April 2025 and 5th April 2026, you must register by 5th October 2026.
Step 2: Keep Records
Keep track of:
- Income
- Receipts
- Expenses
- Invoices
- Mileage logs
- Platform statements
Good bookkeeping makes tax returns much easier. Using platforms like FreeAgent or Xero can help you keep on top of your books and make tax season a lot easier.
Step 3: File Your Tax Return
The tax year runs from 6th April to 5th April, and online tax returns are due by 31st January.
This means for the 2025/26 tax year, your deadline would be 31st January 2027.
Step 4: Pay Your Tax Bill
If you owe tax, this is usually due by the same 31st January deadline. In some cases, you may also need to make Payments on Account for the following year.
What Happens If You Don’t Declare It?
It’s not worth the risk. HMRC is getting better at spotting undeclared side hustle income. With digital platform reporting now in place, it’s much harder to stay under the radar. If you fail to declare taxable income, you could face:
- Late filing penalties
- Interest charges
- Tax investigations
- Additional fines
Side hustles are a great way to boost your income, but tax can get complicated fast.
If you earn under £1,000, you’re usually fine. If you earn over it, it’s time to start paying attention.
Registering with HMRC doesn’t automatically mean a huge tax bill. With the right advice, expense claims and planning, you may owe far less than you think.
If you’ve started earning extra income and aren’t sure what you need to declare, speaking to a Gorilla Accountant early can save you stress (and money) later.
