Side hustles in the UK — freelancing, selling on Etsy or eBay, renting a room, tutoring — are subject to tax once your additional income exceeds certain thresholds. Getting this wrong means unexpected tax bills from HMRC.
The key thresholds you need to know
| Threshold | Amount | What it means |
|---|---|---|
| Trading allowance | £1,000/year | Under this, no tax, no need to declare |
| Property allowance | £1,000/year | First £1,000 of rental income tax-free |
| Self Assessment threshold | £1,000+ trading income | Must register for Self Assessment |
| Class 4 NI threshold | £12,570 profit | Pay 6% NI on profits above this |
What side hustle income you must declare
- Freelance/consulting income above £1,000/year
- Selling goods (eBay, Etsy, Vinted) regularly for profit (not just clearing out your home)
- Rental income (Airbnb, lodger) above the £1,000 property allowance (or £7,500 under Rent a Room scheme)
- Online content creation (YouTube, Twitch) income above £1,000
- Tutoring, coaching, personal training income
Allowable expenses that reduce your tax bill
- Equipment purchased for the business (laptop, camera, tools)
- Software and subscriptions used for work
- A proportion of home costs if you work from home (internet, heating)
- Travel and accommodation for business purposes
- Professional development and training
- Professional indemnity insurance
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About the author
Enrique 'Kike' Faúndez is an Information Systems and Management Control Engineer from Universidad de Chile, with master’s degrees in Finance from Universidad de Chile and Industrial Engineering from Pontificia Universidad Católica de Chile. He has 15+ years of experience in regulated financial services across finance, operations, and digital product development. He founded CashControlly in Santiago, Chile, with the conviction that personal financial control should not be a privilege, but an accessible and well-designed tool.
- Master's in Finance, Universidad de Chile
- Master's in Industrial Engineering, Pontificia Universidad Católica de Chile
- Information Systems and Management Control Engineer, Universidad de Chile
- AI and ITIL certifications
- 15+ years in regulated financial services
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