Selling on Vinted, freelancing on the weekend, renting out a parking space, delivering food after work — millions of people in the UK now earn money on the side. What many don't realise is that HMRC has a clear line for when that income becomes taxable, and since 2025 the online platforms themselves report your sales directly to HMRC. This guide explains exactly when you need to register, what you'll pay, and the one deadline you can't afford to miss: 5 October.
Every individual gets a £1,000 trading allowance per tax year (6 April to 5 April). If your total gross side-hustle income — before any expenses — is £1,000 or less, you owe no tax on it and usually don't need to tell HMRC at all.
Two important details people miss:
There's a separate £1,000 property allowance for rental-type income (like renting out your driveway), so you could use both in the same year.
Once your gross trading income passes £1,000 in a tax year, you must register for Self Assessment. The deadline is 5 October following the end of that tax year.
Concretely: if your side hustle first passed £1,000 between 6 April 2025 and 5 April 2026, you must register by 5 October 2026. Your first tax return and payment are then due by 31 January 2027 (online filing).
Registering is free and takes about ten minutes on GOV.UK — you'll get a Unique Taxpayer Reference (UTR) by post. Register late and you risk "failure to notify" penalties on top of any tax owed.
Side-hustle profit is added on top of your salary, so it's taxed at your marginal rate — the rate on your last pound of income, not your average rate.
| Your total income sits in… | Income Tax on side-hustle profit | Class 4 NI |
|---|---|---|
| Below £12,570 (personal allowance) | 0% | 0% |
| £12,570 – £50,270 (basic rate) | 20% | 6% |
| £50,270 – £125,140 (higher rate) | 40% | 2% |
| Over £125,140 (additional rate) | 45% | 2% |
Example: you earn £35,000 in your day job and make £4,000 profit from freelance design. That £4,000 sits in the basic-rate band, so you'd pay roughly 20% tax + 6% Class 4 National Insurance = about £1,040. Run your own numbers with the UK Self-Employed Tax Calculator, and check how your day-job salary is taxed with the UK Salary Calculator.
Since April 2024 there's no compulsory Class 2 National Insurance — small side hustles only pay Class 4 on profits above £12,570. The UK National Insurance Calculator breaks this down.
When you file, you choose one of these — whichever leaves you with less taxable profit:
Rule of thumb: if your expenses are under £1,000, take the allowance. If you're buying stock or equipment, actual expenses usually win — keep every receipt.
Since January 2025, UK digital platforms — eBay, Vinted, Etsy, Airbnb, Uber, Deliveroo, TaskRabbit and others — must report seller information to HMRC under OECD rules. Platforms report you if you make roughly 30 or more sales or earn around €2,000 (~£1,700) in a calendar year.
Important nuance: selling your own second-hand belongings is not trading. Clearing out your wardrobe on Vinted isn't taxable, no matter the amount (though items sold for over £6,000 each can trigger Capital Gains Tax). Tax applies when you buy or make things in order to sell them, or you're paid for services. If HMRC's data shows income you haven't declared, expect a "nudge letter" — far better to register first.
If tax will take 26–42% of every extra pound you earn, your rates need to reflect that. A freelancer charging £150 a day in the basic-rate band keeps roughly £111 after tax and NI. The Freelancer Day Rate Calculator works backwards from the take-home pay you want to the rate you should charge.
From April 2026, self-employed people and landlords with combined gross income over £50,000 must keep digital records and send quarterly updates to HMRC under Making Tax Digital for Income Tax. The threshold drops to £30,000 in April 2027. Most casual side hustlers are below these thresholds for now, but if your hustle is growing, it's worth knowing the paperwork gets more frequent — not just annual.
No. The trading allowance covers your first £1,000 of gross trading income each tax year. Below that you owe nothing and usually don't need to register or tell HMRC — though you can register voluntarily, for example to pay voluntary NI or claim a loss.
5 October following the end of the tax year in which your side income first passed £1,000. For income earned during 2025/26 (6 April 2025 – 5 April 2026), the registration deadline is 5 October 2026, with the return and payment due by 31 January 2027.
Yes. Since January 2025, digital platforms must report sellers who make roughly 30+ sales or earn around €2,000 in a calendar year directly to HMRC, including your name, address and payment details. HMRC matches this against tax returns.
Generally no. Selling your own used clothes, books or furniture isn't trading, regardless of the amount. Tax applies when you buy or make items specifically to resell at a profit, or when you're paid for work or services. Individual items sold for over £6,000 can trigger Capital Gains Tax.