Do I Need to File a Tax Return if I Have a Side Hustle?
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Do I Need to File a Tax Return if I Have a Side Hustle?
HMRC declares a side hustle as any income-generating activity outside your main job. This could be selling handmade crafts on Etsy, content creation on platforms such as YouTube or TikTok, or even dog walking.
If you are buying or creating goods/services with the intent of profit, HMRC considers this as a business.
What Counts as a Side Hustle
HMRC declares a side hustle as any income-generating activity outside your main job. This could be selling handmade crafts on Etsy, content creation on platforms such as YouTube or TikTok, or even dog walking.
If you are buying or creating goods/services with the intent of profit, HMRC considers this as a business.
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When is my Side Hustle Income Subject to Tax?
Everyone in the UK gets a £1,000 trading allowance each tax year. This means you can earn up to £1,000 gross income from casual work or self-employment without paying tax or reporting it to HMRC. Gross income is the total money you make before deducting expenses such as materials fees, postage etc.
Most people earning taxable side hustle income pay Self-Assessment tax after registering as a sole trader. You must register before 5th October following the end of the tax year in which you earned your taxable income.
HMRC Raises Threshold
HMRC have announced plans to raise the reporting threshold from £1,000 to £3,000 by the end of 2029. This means in the future you won’t need to file a full tax return for income between £1,000 and £3,000, you will just need to report it.
Please note that the £1,000 threshold for reporting and tax still remains in place for now.
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What if I Don’t Pay Tax on my Side-Hustle Income?
Allegedly, digital platforms will only pass data on to HMRC automatically if an individual has total earnings over around £1,700. However, even if your taxable sales are just over £1,000, it is recommended you still register for Self-Assessment and pay any due tax.
If you try to conceal payable tax from HRMC, you are guilty of tax evasion, which is a criminal offence. This means you may face financial penalties, or even a prison sentence.
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Contact BCS Accountants
For Self-Assessment tax advice, contact our team at BCS Accountants. We are based in Bolton-Le-Sands, near Carnforth, but cover Morecambe, Lancaster and Kendal. Call us on 01524 824111. Alternatively, send us a message via our contact form and we’ll be in touch.
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Contact BCS Accountants
Address:
BCS Accountants & Tax Consultants
Border House, 60 Main Road
Bolton le Sands, Carnforth
Lancashire, LA5 8DN
Contact Details:
Tel: 01524 824111
Fax: 01524 825327
Email: enquiries@b-c-s.co.uk
