Tax & Finance · Polar Small Business Update
Side hustle tax rules: the £1,000 question explained
HMRC’s current guidance clears up a common mistake: the £1,000 figure normally looks at total gross income across your side hustles, not £1,000 for each activity.
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If your total gross income from side hustles was more than £1,000 between 6 April 2025 and 5 April 2026, HMRC says you need to tell them. Gross income means money received before expenses. Different hustles are added together. Selling your own unwanted belongings occasionally is different from buying or making goods to sell for profit.
What counts as a side hustle?
HMRC’s examples include selling goods, delivery work, tutoring, dog walking, creating online content, sponsored posts and brand partnerships. The key question is not the fashionable label. It is whether you are carrying on an income-producing activity and how much gross income it produced.
The four points people commonly get wrong
It is gross income
The £1,000 test uses income before expenses, not the profit left afterwards.
It is one allowance
You do not get a separate £1,000 allowance for crafts, content creation and delivery work.
PAYE does not cover it
Having a main job does not automatically deal with tax on separate self-employed income.
Personal items differ
Occasionally selling unwanted possessions will often be treated differently from trading, but use HMRC’s checker if unsure.
A simple example
Suppose you received £800 from content work and £500 from selling crafts during the tax year. The combined gross income is £1,300. HMRC’s campaign says that is above the £1,000 allowance, so you need to tell them even if your expenses reduced the profit.
If you worked extra bar shifts and received a payslip, tax should normally be handled through PAYE. Keep the payslips and check them; that income is not treated in the same way as self-employed side-hustle sales.
What records should you keep?
- Sales totals from every platform, marketplace and payment account.
- Invoices, booking records and cash received.
- Receipts for business expenses.
- Platform fees, postage and payment-processing charges.
- Bank statements used to check that nothing is missing.
- A note explaining personal items sold, where relevant.
HMRC says you remain responsible for full and accurate records even if an accountant or tax agent helps you.
What about the proposed £3,000 reporting tool?
It is not live. HMRC says a new online reporting tool is planned by 2029 for people earning between £1,000 and £3,000 from side hustles. For now, follow the current HMRC process and check whether you need to register for or use Self Assessment.
Make the admin easier
Use the Polar business expense tracker to keep a clean record as you go. If you need to file for 2025/26, check the Self Assessment dates for 2026/27.
Official sources
This article is general information, not tax advice. Allowances and reporting duties depend on your circumstances.