Side hustle tax UK 2026/27

By PaySlipCheck Editorial · Reviewed by PaySlipCheck Editorial Standards Team · 14 June 2026 · 5 min read

UK side hustle income (Etsy, freelance, delivery driving, tutoring) is treated as self-employed profit if it exceeds £1,000/year. Under £1,000, the Trading Allowance covers it — no Self Assessment or tax required. Above £1,000, you must register as self-employed with HMRC by 5 October in the second tax year of earnings, and file Self Assessment annually. Tax = your marginal rate on the profit. A basic-rate PAYE earner with £5,000 side hustle profit pays £1,000 Income Tax + £300 Class 4 NI (once total income exceeds £12,570). This guide covers the mechanics.

Verified against 3 official sources · Last reviewed 14 June 2026
On this page
  1. The £1,000 Trading Allowance
  2. Above £1,000 mechanics
  3. Registration deadline
  4. Common side hustles + tax
  5. In short

The £1,000 Trading Allowance

  • Applies to trading income (self-employment) + property income separately
  • Fully tax-free below £1,000
  • No SA required
  • No records needed

If you earn between £1,000 + £2,000 you can choose: - Deduct actual costs (if profits are low) - Use trading allowance instead (if costs are minimal)

Above £1,000 mechanics

Say £5,000 side hustle income with £500 costs: - Trading allowance (£1,000) or actual costs (£500) — pick the higher - Trading allowance wins here: £4,000 taxable profit

For a PAYE earner: - £4,000 profit added to PAYE income - Taxed at your marginal rate

At basic-rate (main job £30k + side £4k): - All £4,000 in basic-rate band - Income Tax: £4,000 × 20% = £800 - Class 4 NI: £4,000 × 6% = £240 - Total: £1,040 tax - Net side hustle: £2,960

At higher-rate (main £55k + side £4k): - All £4,000 in higher-rate band - IT: £4,000 × 40% = £1,600 - Class 4 NI: £4,000 × 2% = £80 - Total: £1,680 tax - Net side hustle: £2,320

Registration deadline

Register with HMRC by 5 October in the second tax year of self-employment income: - Started April 2026: register by 5 October 2027

Common side hustles + tax

  • Delivery driving (Uber Eats, Deliveroo, Amazon Flex)
  • Freelance design/writing
  • Etsy craft sales
  • Tutoring
  • Selling on eBay (when trading, not clearing house)

All treated the same — self-employment profit above £1,000.

In short

Under £1,000/year side hustle income = tax-free. Above £1,000 = Self Assessment + tax at your marginal rate. Register with HMRC by 5 October in second tax year.

Frequently asked questions

What's the £1,000 trading allowance?

Annual tax-free amount for trading income. If you earn less, no SA needed.

Do I pay NI on side hustle?

Class 4 NI at 6% (below £50,270) or 2% (above) if profits exceed £12,570 combined with other self-employment.

When do I register with HMRC?

By 5 October in the second tax year of self-employment income.

Can I claim expenses?

Yes — actual costs OR trading allowance (£1,000) but not both. Use whichever is higher.

What if my side hustle grosses under £1k?

No SA, no tax, no registration. Enjoy.

Related calculators

Related guides

  • How to become self-employed — UK self-employment in 2026 in six steps: choose structure (sole trader or limited company), register with HMRC (£0 sole trader, £12 limited), open business account, set up accounting, plan tax + NI, check IR35 if contracting. Setup typically 1-2 weeks.
  • Best UK side hustles — The "best" UK side hustle depends on your existing skills, available
  • How to read a payslip — A UK payslip has up to 20+ separate lines, each with a specific
  • Why take-home varies — UK monthly take-home rarely sits exactly flat even on a steady
  • UK monthly budget planner — A workable UK monthly budget planner: confirm your real net pay, list fixed essentials, list variable essentials, set a discretionary cap, set a savings target. Total must equal net pay. Use 50/30/20 as a starting guide, adapt for your housing situation.
  • Average UK monthly bills — UK average monthly bills in 2026: ~£1,650 for a single adult, £2,400 for a couple, £3,200 for a family of four. Major lines: rent/mortgage (35–45%), food (10–15%), utilities (8–10%), transport (10–15%), insurance + tax + broadband (~10%).
  • Money left after bills — UK households should target 20–35% of take-home pay as discretionary spend + savings after essential bills. The exact figure depends on salary band, region and household type. This guide gives benchmarks for £25k–£100k earners.

More on related topics

  • Married couple £100k combined — £100,000 UK combined married couple (£50k + £50k) takes home ~£79,040/year. Neither spouse triggers the £100k personal allowance taper. Splitting equally is substantially better than single-earner £100k (£66,253 net).
  • Married couple £50k combined — A married couple with £50,000 combined income (£30k + £20k) takes home ~£43,460/year vs single-earner £39,520 at £50k. Two personal allowances used + lower band structure = £3,940/year advantage.
  • Part-time salary tax — UK part-time workers get the full £12,570 personal allowance same as full-time. £15,000 part-time salary takes home ~£13,800/year (much of it tax-free); £20,000 part-time = ~£18,140 net.

Related salary breakdowns

Sources

All figures on this page are sourced from official UK government publications. We don't cite secondary commentary or other calculator sites.

  1. GOV.UK — Income Tax rates
  2. GOV.UK — Working for yourself
  3. MoneyHelper — Employee benefits

For the calculation methodology behind every figure on this page, see our methodology. For our review and update process, see our editorial standards.

Last reviewed: 14 June 2026. Next review due 14 December 2026.

Disclaimer: This page provides general information based on published HMRC and gov.scot figures. It is not personal tax or financial advice. For your specific situation, please consult a qualified accountant or contact HMRC directly.