As tax season approaches, many individuals dread the looming deadlines and paperwork. However, it’s not just business owners or high earners who need to prepare. HMRC has issued an urgent reminder: if you’ve earned over £1,000 from a side hustle, you might need to file a Self Assessment tax return.

This guidance may come as a surprise to many who assume tax returns are only for the self-employed or those with complex finances. In reality, gig workers, property landlords, and online content creators are now squarely in HMRC’s sights. Let’s unpack what this means for you.

Is Your Side Hustle Earning You Over £1,000? HMRC Wants to Know

Side Hustlers Making Over £1,000:

Whether you’re selling handmade crafts on Etsy, working as a freelance designer, or running an online shop, HMRC expects you to declare any income above £1,000. This threshold applies even if your side hustle is a passion project or occasional work.

Gig Economy Workers:

Delivering food for Deliveroo, driving for Uber, or doing odd jobs on TaskRabbit? You’re considered self-employed. Even if you work part-time or casually, any earnings must be declared through a tax return.

Landlords Earning Rental Income:

Renting out a property—or even just a spare room—can bring in extra cash, but it comes with tax obligations. If your rental income exceeds specific allowances, you need to report it to HMRC.

Content Creators and Influencers:

Making money from YouTube ads, TikTok sponsorships, Instagram collaborations, or selling merchandise? If your earnings top £1,000, you must declare this as taxable income.

Who Needs to File a Tax Return?

Filing a tax return doesn’t have to be stressful. By following these steps, you can ensure you’re compliant and avoid penalties:

Track Your Earnings and Expenses:

Maintain accurate records of your income and any expenses related to your side hustle. These could include platform fees, equipment costs, or travel expenses.

Register for Self Assessment:

If this is your first time filing, register for HMRC’s Self Assessment system. The deadline to register is typically October 5th following the tax year in which you earned the income.

File Before the Deadline:

The deadline for filing your online tax return is January 31. Late submissions incur penalties, so start preparing your documents early.

Seek Expert Help:

Unsure about your tax obligations? Consulting a tax professional can save you time and ensure your return is error-free.

How to Stay on Top of Your Tax Obligations

Failing to declare side hustle income can result in penalties, fines, and even an investigation by HMRC.

Don’t let tax season catch you off guard—ensure you meet all your obligations while taking advantage of any allowable deductions to reduce your tax bill.

At The Tax Faculty, we specialise in helping individuals navigate complex tax rules, including those for side hustles, gig work, and rental income. Our award-winning team is here to ensure you stay compliant and maximise your earnings.

Ready to take the stress out of your taxes? Contact us today on 0800 0016 878 or info@thetaxfaculty.co.uk for expert advice and tailored support.

Why Act Now?

Capital Gains Tax Expertise: The Tax Faculty LLP Managing Partner Charles Tateson Named UK Capital Gains Tax Advisor of the Year 2023

The Finance Monthly Taxation Awards recognises the achievements of tax professionals from around the globe.

Winning such an award is no small feat. It is a reflection of hard work, extensive knowledge, and an ability to navigate the intricacies of the UK tax system.

Read more about Charles and the award here.

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