UK side hustles face tax rules—here’s what you need to know
Many people are turning to side hustles to earn extra cash, but some may not realise the tax rules involved. The UK’s tax-free trading allowance lets individuals earn up to £1,000 a year without paying tax. However, exceeding this limit means registering for Self Assessment and filing a return by January 31, 2026.
The £1,000 tax-free allowance applies to all side income, whether from selling items, renting out space, or offering services. Selling unwanted goods on platforms like eBay or Vinted usually avoids tax if no profit is intended. But selling a single item for £6,000 or more may trigger Capital Gains Tax, requiring a report to HMRC.
The £1,000 tax-free allowance provides flexibility for small-scale earners. Anyone making more must declare their income and pay tax by the deadline. Failing to comply risks penalties, so side hustlers should track their earnings carefully.
