Do I pay tax on a side hustle?

For people earning extra money on the side, such as selling online, casual work or freelancing.

Applies to: England, Scotland, Wales, Northern Ireland Last checked against official sources: 6 October 2026

You may pay tax on a side hustle if it counts as trading and you earn more than £1,000 a year from it.

The first £1,000 of trading income a year is tax free under the trading allowance.
Over £1,000, you take off either the £1,000 allowance or your actual expenses, not both.
You must register for Self Assessment by 5 October after the tax year ends.
Selling regularly to make a profit usually counts as trading. If you only sell now and then, check with HMRC.
Self-employed profits over £12,570 also pay Class 4 National Insurance.

Key facts

£1,000 trading allowance
Over £1,000: register for Self Assessment
Register by 5 October
Class 4 NI on profits over £12,570

What counts as a side hustle

A side hustle is any way of earning money on top of your main income. Examples are selling things you make, doing casual work like gardening, delivery or babysitting, renting out your tools or equipment, or making online content.

The key question for tax is whether you are trading. You are probably running a business if you:

take responsibility for whether it succeeds or fails
sell regularly to make a profit
buy or make things to sell on, online, at car boot sales or through adverts

If you only sell things now and then, check with HMRC's online tool whether you need to report it.

The £1,000 trading allowance

The trading allowance lets you earn up to £1,000 a year from trading without paying tax on it. It covers self-employment, casual services and hiring out personal equipment.

Your trading income in the tax year	What happens
£1,000 or less	Usually tax free. You normally do not need to tell HMRC
More than £1,000	Tell HMRC through Self Assessment. Take off the £1,000 allowance or your actual expenses

You cannot use the allowance on income from:

a company you, or someone connected to you, owns or controls
a partnership where you, or someone connected to you, is a partner
your employer, or your husband's, wife's or civil partner's employer

There is a separate £1,000 property allowance for income from property.

How much tax you pay

Your side hustle profit is added to your other income, such as wages. It is then taxed at your normal Income Tax rate. If your job already uses up your £12,570 Personal Allowance, all of the profit is taxed, usually at 20% or more.

Worked example (2026/27): You earn a salary of £30,000 and make £3,000 selling crafts online. Your costs are small, so you use the trading allowance.

Taxable profit: £3,000 minus £1,000 = £2,000
Income Tax at the basic rate: £2,000 x 20% = £400
No Class 4 National Insurance, because profits are under £12,570

If your real costs were more than £1,000, you could claim those instead, which would lower your profit.

National Insurance on side income (2026/27)

Profit	National Insurance
Under £7,105	None due. You can choose to pay voluntary Class 2 at £3.65 a week to protect your record
£7,105 or more	Class 2 treated as paid, so you pay nothing for it
Over £12,570 to £50,270	Class 4 at 6%
Over £50,270	Class 4 at 2% on the part above

How to tell HMRC

Check if you need to report the income using HMRC's online checker.
Register for Self Assessment by 5 October after the end of the tax year. For income in 2025/26, the deadline is 5 October 2026.
Keep records of what you earn and spend.
Send your tax return and pay any tax due.

Scotland, Wales and Northern Ireland

The trading allowance and Self Assessment rules apply across the UK. If you live in Scotland, your profit is taxed at Scottish Income Tax rates (19% to 48% in 2026/27) instead of the rates above.

Related guides

Where this comes from

Get it done

This takes you to the official service, which is free to use.

Check if you need to tell HMRC

Common questions

Do I need to tell HMRC if I earn under £1,000 from a side hustle?

Usually not. Trading income of £1,000 or less a year is normally covered by the trading allowance, though there are some exceptions.

Can I have a job and a side business?

Yes. You can be employed and run a business at the same time, for example working for an employer by day and running your own business in the evenings.

Official sources

1.Working for yourself (GOV.UK)www.gov.uk/working-for-yourself
2.Tax-free allowances on property and trading income (GOV.UK)www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
3.Register for Self Assessment (GOV.UK)www.gov.uk/register-for-self-assessment
4.Self-employed National Insurance rates (GOV.UK)www.gov.uk/self-employed-national-insurance-rates

Checked against GOV.UK on 6 October 2026

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