HM Revenue and Customs (HMRC) has issued a warning to workers earning extra income through side hustles, reminding them that anyone making more than £1,000 a year outside their main job may need to register for Self Assessment and submit a tax return. The rule applies to a wide range of additional income sources, including online selling, renting property, and content creation.
£1,000 Tax-Free Allowance For Side Income
Individuals in the UK can earn up to £1,000 per tax year from casual trading or side income without paying tax. This is known as the trading allowance.
However, once earnings from additional activities exceed this threshold, taxpayers are required to notify HMRC and may need to complete a Self Assessment tax return depending on their circumstances.
Who Must Register For Self Assessment
HMRC says individuals may need to register if they are newly self-employed, earning income from property rentals, involved in business partnerships, or making more than £1,000 from side activities such as online sales or content creation.
Multiple small income streams are combined when assessing the £1,000 limit, meaning several minor activities can push total earnings above the threshold.
Tax Return Deadlines And Registration Rules
Those who need to report additional income must register for Self Assessment by October 5 following the end of the tax year. The deadline for submitting a tax return is January 31, with payments due on the same date.
HMRC has warned that failing to declare earnings can result in penalties, even if no tax is ultimately owed.
Penalties For Late Filing Or Non-Compliance
Late tax returns can trigger an immediate £100 fine, with additional charges increasing over time. After three months, daily penalties of £10 can apply, up to a maximum of £900. Further penalties may be added after six and twelve months, alongside interest on unpaid tax.
HMRC also imposes percentage-based penalties on unpaid tax, which increase the longer the payment is delayed.
HMRC Reminder To Workers With Extra Income
The tax authority has urged individuals to check whether their side income qualifies as taxable and to use official online tools or the HMRC app for guidance.
Officials stressed that responsibility for declaring additional income lies with the individual, not employers, as side earnings are not included in standard payroll reporting.
Growing Number Of Side Hustle Workers
The warning comes amid a rise in gig economy and freelance work, with more people earning additional income through online platforms and independent trading activities. HMRC says all such earnings must be monitored carefully to ensure compliance with tax rules.
