Earning £500 a month from Vinted, Etsy, freelance design, or any other side hustle? If it tips over £1,000 a year, HMRC wants a Self Assessment return — and a slice of the cash. This calculator works out exactly how much, on top of a regular salary, using 2025/26 rates.
UK Side-Hustle Tax Calculator
Find out exactly how much tax and National Insurance you owe on side income on top of a regular salary. 2025/26 HMRC rates.
The trading allowance lets you earn up to £1,000 of side income tax-free with no need to file. If your gross side income is over £1,000 you can still deduct the flat £1,000 instead of actual expenses — whichever is higher.
—
How UK side-hustle tax works
If you have a regular PAYE salary and you earn extra cash on the side, the side income sits on top of your salary in the tax stack. Whatever band your total income falls into is the rate the side earnings get taxed at — so a basic-rate salary worker pays 20% income tax plus 6% Class 4 National Insurance on side profits, while a higher-rate earner pays 40% plus 2% Class 4 on every extra pound.
There are two key reliefs that make this less painful than it sounds. The trading allowance covers the first £1,000 of side income tax-free with no need to register or file. Anything above that is taxable, but you can deduct either your actual expenses or a flat £1,000 allowance, whichever is higher. For low-overhead hustles — reselling, tutoring, content writing, dog walking — the flat £1,000 usually wins.
The £1,000 myth. The trading allowance does not mean you can earn £1,000 tax-free on every platform. It is one allowance per person, across all your side activities combined.
Who needs to file Self Assessment?
- Under £1,000 gross side income. Covered by the trading allowance. No return required. Keep records anyway in case HMRC asks.
- £1,000–£50,000. Register for Self Assessment by 5 October after the tax year ends. File the return by 31 January following.
- Over £50,000. Self Assessment required, and check whether you need to register for VAT (the threshold is £90,000 of taxable turnover on a rolling 12-month basis). At this scale a limited company may be more tax-efficient — worth a conversation with an accountant.
- Selling personal items. Selling old clothes, furniture, or your own possessions is not "trading" — no Self Assessment needed regardless of amount. Buying to resell is trading and counts.
What counts as a side hustle?
HMRC uses the "badges of trade" — a set of indicators including frequency of transactions, profit motive, alterations or additions made to items, and how the activity is funded — to decide whether you are trading. Examples that almost always count: reselling on eBay/Vinted/Depop with the intent to make a profit, freelance writing, design, or coding, tutoring, dog walking, Airbnb hosting, content monetisation (YouTube, Twitch, Substack), affiliate marketing, dropshipping, print-on-demand.
What does not count: selling your own used belongings, occasional gambling winnings, gifts, or competition prizes. If you are unsure, run the calculator with worst-case numbers — if the tax is small, it is probably worth declaring just to stay on the right side of the rules.
How to keep more of your side-hustle income
- Track expenses from day one. Even small things — postage, packaging, software subscriptions, a fraction of your home-office costs, mileage at HMRC's 45p/mile rate — add up. Most people under-claim because they did not log it.
- Use the £1,000 flat allowance if your real expenses are lower. Most digital-first hustles (writing, voice-over, online tutoring) have almost no real overhead; the £1,000 flat deduction is bigger than anything they could claim.
- Make a SIPP contribution. Pension contributions reduce your taxable income at your marginal rate. A higher-rate side hustler can effectively reclaim 40% of every pound paid into a SIPP.
- Keep records for 5 years. HMRC can ask. A free spreadsheet with date, amount, description, and the platform is fine — you do not need accounting software at this scale.
- Pay tax on account. Once your side-hustle tax bill exceeds £1,000, HMRC asks for "payments on account" — 50% of next year's estimated bill in two instalments. Budget for it.
Frequently asked questions
I earn just under £1,000 — do I still register?
No, you don't need to register or file. But if you expect to grow past £1,000 next year, registering early is fine — it costs nothing and saves a deadline crunch later.
Will HMRC find out?
UK platforms (eBay, Vinted, Depop, Etsy, Airbnb, Uber, Deliveroo, etc.) report seller data to HMRC under the digital-platform reporting rules introduced in 2024. So yes, HMRC sees the gross figures — declaring before they ask is much cheaper than letting them ask first.
What about VAT?
VAT registration becomes mandatory once your taxable turnover crosses £90,000 in any rolling 12-month period (not tax year). You can register voluntarily earlier if your customers are VAT-registered businesses who can reclaim it — otherwise voluntary registration usually makes you more expensive to consumer buyers.
Does this calculator include Class 2 NI?
Class 2 NI was effectively abolished from April 2024 for the self-employed earning above the Small Profits Threshold. You may still pay it voluntarily if your profits are below £6,725 to maintain your state pension record — currently £3.45 per week.
Salary calculator too?
Pair this with our UK Take-Home Pay Calculator to see your full picture — salary + side hustle — net of every tax, NI, and student loan.
