HMRC’s side hustle campaign – do I need to pay tax on my side hustle?

In recent years, side hustles have become an increasing part of the UK’s gig economy. Enforced time at home due to the  pandemic, the cost-of-living crisis and increasingly user-friendly apps have accelerated this shift. From selling vintage clothes, handmade goods, offering freelance services or monetising social media content, many individuals are finding creative ways to boost their income. 

HMRC launched its ‘Help for Hustles’ campaign earlier this year to promote awareness and the need to consider tax compliance among side hustlers. 

What is HMRC's 'Help for Hustles' Campaign? 

The Help for Hustles campaign aims to educate the public about when and how to declare income earned outside of regular employment. The campaign provides guidance, real-world examples, and easy-to-follow steps for those earning money through side hustles to stay on the right side of tax legislation.  

From 17th February to 30th May 2025, HMRC wrote to individuals it suspected were not reporting side hustle income to prompt them to think about whether they needed to report or pay tax on that income. HMRC received this data from online marketplaces about the sellers using their platforms. 

Is paying tax on side hustle income a new rule? 

There are no new rules about side hustle income being taxable. The tax rule in point is whether your side hustle counts as ‘trading,’ and if it does and your income goes over a certain amount, you may have income tax to pay. 

The Help for Hustles campaign is a timely reminder of the existing rules because of: 

• the increase in popularity of making extra money outside regular employment or self-employment work; and 
• HMRC’s ability to get data from online marketplaces and other platforms about sellers. 

What side hustles are covered? 

Help the Hustle covers a number of popular side hustles: 

• Selling: Art and crafting, vintage clothes online 
• Providing Services: Tutoring, dog walking, delivery driving 
• Content Creation: Influencers and online creators
• Property Rental: Renting out property, including short-term lets like Airbnb, falls under separate tax rules  
• Multiple Hustles: Income from different sources must be combined 

Does my side hustle count as ‘trading’? 

If you declutter your house and sell a few unwanted items or occasionally babysit a neighbour’s child for the evening, this is unlikely to class as trading. But buying vintage clothes to resell, selling your art or homemade products or upcycling could be classed as trading.  

HMRC looks to case law for what counts as a trade including the so called ‘badges of trade, which are found here.  

The signs of your side hustle being a trade include: 

• Intending to make a profit 
• Multiple transactions 
• Similarity to existing trades 
• Making changes to items before selling 
• Selling items quickly 
• Acquiring things to sell them on 

What is the trading allowance? 

One of the key features highlighted by HMRC is the £1,000 trading allowance. This means if your total income from self-employment or casual services in a tax year is £1,000 or less, you do not need to report it to HMRC or pay tax on it.  

However, if you earn more than £1,000, you must: 

• Register for self-assessment 
• File a tax return 
• Pay any tax due 

Common side hustle myths – real news or fake news? 

Many people assume side income will be taxed via their main job’s PAYE code or that if they stay below a certain number of sales, they are always tax-free. HMRC clarifies that: 

• Side hustle income is not automatically taxed through your main job. 
• The £1,000 allowance applies across all activities, not per side hustle. 
• The number of sales does not matter total income does. 
• Decluttering personal items usually is not taxable unless an individual item sells for over £6,000, potentially triggering Capital Gains Tax. 
• Content creators and influencers must include earnings from sponsorships, ads, and even gifted products. 

How to stay compliant 

To avoid penalties or backdated tax bills, follow these steps: 

• Calculate your income: Total all side hustle earnings and self-employment income for the year. 
• Register for self-assessment: If £1,000 or more – do this by 5th October following the end of the tax year you earned the income. 
• Keep records: Track income and expenses carefully. Consider using digital tools or spreadsheets. Some online platforms provide a sales summary statement against your account. 
• Get support: Visit HMRC’s website or consult a TaxAssist Accountant for personalised help. 

Need help tracking your side hustle income? 

With side hustles on the rise, HMRC’s Help for Hustles campaign is a helpful reminder that all income must be tracked carefully in case you breach the £1,000 trading allowance. Staying informed and organised will help you avoid surprises and stay compliant. 

Need help understanding your tax obligations? Contact our team today to arrange a free, initial consulatation. 

Last updated 2 Jul 2025 | First published 2 Jul 2025

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This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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