Answers · UK 2025/26
Do I pay tax on side hustle income in the UK?
Yes if gross side-hustle income exceeds £1,000/year (Trading Allowance). Above £1,000, register with HMRC for Self Assessment by 5 October following the tax year. Tax is at your marginal Income Tax rate plus Class 4 NI (6%/2%) if profits exceed £12,570.
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UK side-hustle tax 2025/26. Gross income under £1,000: covered by the Trading Allowance — no tax to pay, no Self Assessment required. This includes eBay flipping, casual freelance, hobby crafts, gig work, content creator income, tutoring etc. Gross over £1,000: must register for Self Assessment by 5 October after the tax year, then file by 31 January. Two methods: (1) Trading Allowance method — deduct £1,000 from gross income, no other expenses claimable. (2) Actual expenses method — record income and "wholly and exclusively" business expenses (home office, mileage, equipment depreciation, marketing). Use whichever gives lower tax. Tax calculation: side-hustle profit added to your other income. Examples: £8,000 side income on £30,000 salary = total £38,000. £8k taxed at basic 20% + Class 4 NI at 6% = £2,080 tax (you keep £5,920). If pushed into higher rate (40% Income Tax + 2% NI): same £8k taxed £3,360. Class 4 NI threshold (£12,570/yr) applies to side income — so first £12,570 of self-employed profit is NI-free, but only if you have NO other employment OR your total NIable earnings stay below threshold. Most realistic for second-income earners: Class 4 NI starts immediately. HMRC checks: marketplaces like eBay, Vinted, Airbnb, Etsy now share seller data with HMRC since 2024.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.