A side hustle alongside a job is taxed more simply than most people expect. There's one allowance, one form and a few dates to know. This guide covers how it works in the 2026 to 2027 tax year, with worked examples. If your side hustle is selling things online, the Vinted tax checker gives you your own answer and dates.
What counts as a side hustle?
For tax, a side hustle is usually self-employed income on top of your job. For example:
- buying things to sell on, or making things to sell
- services like dog walking, tutoring, cleaning, nails or photography
- delivery or gig work where you're self-employed
- content creation, like brand deals or ad income
Two things usually don't count as trading:
- Selling your own old things. Clearing out your wardrobe usually isn't taxed. See do you have to pay tax on Vinted.
- Renting out property, like a driveway. That's property income, with its own separate £1,000 property allowance.
The £1,000 line
The first £1,000 of trading income each tax year (6 April to 5 April) is tax-free under the trading allowance. It's counted on what customers paid you, before costs, and it's one allowance across all your side hustles. If your total is £1,000 or less, you usually don't need to tell HMRC.
Over £1,000, you usually need to register as self-employed by 5 October after the tax year, then file a return and pay by 31 January.
How much tax you pay on a side hustle
Tax is on your profit: your takings minus either your costs or the £1,000 allowance, whichever is bigger. That profit is added to your pay and taxed at the normal rates.
Income Tax rates for 2026 to 2027 (England, Wales and Northern Ireland):
| Band | Income | Rate |
|---|---|---|
| Personal allowance | Up to £12,570 | 0% |
| Basic rate | £12,571 to £50,270 | 20% |
| Higher rate | £50,271 to £125,140 | 40% |
| Additional rate | Over £125,140 | 45% |
Scottish rates differ. If your income is over £100,000, your personal allowance starts to reduce.
Because your job usually uses up your personal allowance, your side profit is usually taxed at the rate of the top slice of your pay: 20% for most people.
National Insurance on side hustle profits
Self-employed National Insurance is worked out on your side profit on its own, not added to your salary. For 2026 to 2027:
- no National Insurance on profits of £12,570 or less
- 6% on profits between £12,570 and £50,270
- 2% on profits over £50,270
So most side hustles pay Income Tax but no National Insurance.
Worked examples
Ali: job £35,000, side profit £3,000. His job uses his personal allowance and he's a basic-rate taxpayer. Tax on the side profit: £3,000 × 20% = £600. No National Insurance.
Beth: job £60,000, side profit £3,000. She's already a higher-rate taxpayer. Tax on the side profit: £3,000 × 40% = £1,200. No National Insurance.
Dee: job £48,000, side profit £4,000. Her pay leaves £2,270 of the basic-rate band. So £2,270 is taxed at 20% (£454) and £1,730 at 40% (£692). Total: £1,146.
Chris: no job, side takings £11,000, profit £9,000. His personal allowance covers the £9,000, so he pays no Income Tax and no National Insurance. He still needs to register and file, because his takings are over £1,000.
Your employer won't sort this out
PAYE only covers your job. Your side profit goes through Self Assessment, and you pay HMRC yourself. If you already pay tax through PAYE, owe less than £3,000 and file online by 30 December, HMRC will usually collect it through your tax code over the next tax year, unless you say on your return that you'd rather pay in one go.
Payments on account
If your Self Assessment bill is £1,000 or more, HMRC usually also asks for two advance payments towards next year, each half this year's bill, on 31 January and 31 July. This doesn't apply if more than 80% of your tax is already taken from your pay. It catches a lot of people out in their second year, so put money aside. If your takings grow past £20,000 a year, check whether Making Tax Digital applies to you.
The "side hustle crackdown": what's actually changed
- Since 2024, selling apps report busier sellers to HMRC. That's reporting, not a new tax.
- The £1,000 allowance hasn't changed.
- A simpler way to report £1,000 to £3,000 of side income has been announced, and the government says it will come in within this Parliament, so by 2029 at the latest. Until then, over £1,000 means registering and filing as normal.
If your side income is from a second employed job rather than self-employment, it works differently. See second job tax.