Answers · UK 2025/26

Do I need to declare side hustle income under £1,000 a year?

No -- the £1,000 trading allowance means you do not need to register for Self Assessment or declare income from casual self-employment, freelancing, or selling goods if your gross income from that activity is £1,000 or less in a tax year. Above £1,000, you must register and report it, though you can still deduct the £1,000 allowance instead of actual expenses if that is better for you.

Last updated: 1 July 2026Last reviewed: 1 July 2026How we verify

Full answer

The trading allowance is a simple, automatic exemption designed to keep small, casual amounts of side income out of the Self Assessment system entirely, without any claim or paperwork needed if you stay under the threshold. **How the £1,000 threshold works** If your total GROSS income (before any expenses) from self-employment, freelancing, or trading-type activity is £1,000 or less in a tax year, it is entirely tax-free and does not need to be reported to HMRC or declared on a Self Assessment return, and you do not need to register as self-employed for that activity. **What happens above £1,000** Once gross trading income exceeds £1,000, you generally need to register for Self Assessment and report the FULL income, but you can then choose to deduct either your actual allowable business expenses, OR simply the flat £1,000 trading allowance instead (whichever is more beneficial), rather than being forced to itemise expenses if the flat allowance is more generous. **Worked example** Someone sells handmade crafts online, earning £1,400 in gross sales in a tax year, with £300 of actual allowable expenses (materials, postage). They can either deduct the £1,000 flat trading allowance (leaving £400 taxable) or deduct their actual £300 of expenses (leaving £1,100 taxable) -- the flat allowance is more beneficial here, so they would elect to use the £1,000 allowance instead of itemising the smaller £300 of actual expenses. **Multiple income sources and the allowance** The £1,000 trading allowance is a SINGLE allowance covering all your miscellaneous trading-type income combined, not £1,000 per separate side activity -- someone with several small side hustles adds all the gross income together against the same single £1,000 threshold. **What counts, and what doesn't** The allowance covers genuinely trading-type income (selling goods or services, freelance work, casual self-employment), but does not apply to rental income (which has its own separate £1,000 property allowance) or to income already taxed as employment. **Practical tip** Keep basic records of gross side income even while under £1,000, since crossing the threshold partway through a tax year means you need accurate records of the FULL year's income, not just the portion after you realised registration was required.