How To File Tax Returns For Your Side Hustle

Anyone in the UK earning extra money outside their main job must check if they need to register for Self Assessment. HM Revenue and Customs says this applies to people making money through side gigs such as tutoring, dog walking, online selling, content creation, or property rental. The number 1 rule is that if the income from this work goes over £1,000 in a tax year, the person may need to register and file a tax return.

According to HMRC’s insight from 2023, 1 in 10 people in the UK work in what they call the “hidden economy”, with 65% of them running side hustles. Many are unaware that they should be paying tax on the money they make outside their main job.

People doing casual or flexible work, such as offering services through apps or selling items online, are also being asked to take their tax obligations seriously. Earning less than £1,000 means no action is needed, but earning more means they may have to report it.

 

How Do People File A Return?

 

Those who need to complete a return must register to receive a Unique Taxpayer Reference, or UTR. This is done online through the government’s website, GOV.UK and the side hustler needs to have submitted the Self Assessment return for the 2024 to 2025 tax year by 31 January next year.

Filing early is encouraged, because it helps people know where they stand financially and gives more time to plan any payments. Filing early also makes it easier to spread payments if necessary. HMRC has made their digital systems easier to use, and there are step-by-step guides on GOV.UK under the Tax Help for Hustles campaign.

Sole traders or landlords who earn over £50,000 also need to prepare for new rules from April 2026. They must keep digital records and send updates every three months using specific software as part of Making Tax Digital for Income Tax.

 

What Happens If One Doesn’t Register Or File Tax Returns For Side Hustles?

 

Failing to register and file can lead to penalties. If someone should have paid tax and did not, they might be charged interest and fines. People who realise they missed something from past tax years are encouraged to correct it as soon as possible. HMRC’s website has help for anyone in this situation.

Keeping records is also important. Whether someone is selling products or offering services, they should keep proof of what they earn and spend. This includes receipts, invoices, and bank records.

 

 

Are There Any Exceptions To This?

 

People selling their own second-hand belongings do not usually have to pay tax on those sales, as this is not counted as trading. There is also no truth to the rumour that people can sell up to 30 items before being taxed. The £1,000 allowance is the actual benchmark.

For those involved in cryptoassets, there are now dedicated sections in the Self Assessment form to declare gains or income separately.

Selling crypto, exchanging one type for another, or even using it to make purchases can count towards taxable income or capital gains. Crypto received through work or activities such as staking may also require declaring for Income Tax and National Insurance purposes.

 

Where Can Side Hustlers Get Help?

 

HMRC says support is available online, that has tools to check whether a tax return is needed. People with health conditions or special personal circumstances can also access extra help.

For those who want more help, agents or accountants can handle the process on their behalf, but it is important to register on time.

Myrtle Lloyd, HMRC’s Director General for Customer Services, said, “Whether you are selling handmade crafts online, creating digital content, or renting out property, understanding your tax obligations is essential. If you earn more than £1,000 from these activities, you may need to complete a Self Assessment tax return.

“Filing early puts you in control – you will know exactly what you owe, can plan your payments, and avoid the stress of the January rush. You don’t need to pay immediately when you file – you have until 31 January to settle your tax bill.”