Self-Employment & Side Hustles 

What if you earn money without having a normal employer? 

You may earn money through activities such as: 

• tutoring 

• babysitting 

• freelance work 

• selling products 

• design or coding work 

• content creation 

• streaming 

• other side hustles 

 

Depending on what you are doing, this income may count as trading or self-employment income. 

 

The £1,000 trading allowance 

The trading allowance provides a tax exemption of up to £1,000 a year for certain trading income, including self-employment and casual services such as babysitting. (GOV.UK) 

 

If your annual gross trading income is £1,000 or less, you may not need to tell HMRC, although there are exceptions and you must still keep records of the income. 

 

If your gross trading income is over £1,000, HMRC says you must register for Self Assessment. (GOV.UK) 

 

“Gross income” means the amount received before expenses or allowances are deducted. 

 

What if you have expenses? 

If your gross trading income is more than £1,000, you may be able to use the trading allowance instead of deducting actual business expenses. You cannot normally use both against the same income. (GOV.UK) 

 

Selling your own belongings 

Selling personal possessions does not automatically mean you are self-employed. Whether tax applies depends on what you are doing — for example, whether you are actually trading rather than simply selling unwanted belongings. 

 

Remember the 3 Rs 

Register — check whether you need to register for Self Assessment. 

Records — keep accurate records of your income. 

Returns — complete a Self Assessment tax return when required. 

 

Key takeaway 

A side hustle can create tax responsibilities. Track your income from the start and check HMRC guidance once your activity begins earning money.