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Side Hustle Tax Has Two Deadlines And The First Is October

ended 23. July 2026

Most people with a sideline know one tax date: 31 January. There is an earlier one, and it is the one that catches them. Anyone new to Self Assessment needs to register for the 2025 to 2026 tax year by 5 October 2026, nearly four months before the online return and any tax due have to be in by 31 January 2027. Registering and filing are two separate obligations with two separate deadlines, a point HMRC repeated in a reminder published on 21 July 2026 aimed at wedding suppliers, hobby businesses and content creators.

Here is the part the coverage buries. The £1,000 test is not a test of profit. HMRC's own guidance defines gross income as “the total amount you would put on your tax return before any allowances or expenses are taken off”, so someone who spent more on kit, stock and travel than they took in can still be required to register. It also aggregates. The threshold “covers all side hustle income combined”, so £600 from wedding photography and £500 from social media posts crosses the line even though neither felt like a business. The trading allowance itself, which is a separate thing from the reporting threshold the government has said will rise to £3,000, has sat at £1,000 since 6 April 2017, nine years without an increase.

HMRC said in its 21 July reminder, citing research it commissioned and published in 2023, that one in ten people in the UK are operating in the hidden economy, with 65 per cent of those individuals largely unaware they should be registered for tax. In that research, setting aside those who gave other reasons, the most common answer for not declaring was that the income was too small so they did not know they had to, at 35 per cent, followed by too small and not worth the time, at 32 per cent. This is confirmed policy already in force, not a change: the reminder is new, the obligation is not. The people it catches are the parent selling cakes at weekends, the videographer doing two summer weddings, and the driver who did a bit of both.

  1. HMRC says most people in the hidden economy are largely unaware they should be registered, and the most common reason its research recorded for not declaring was simply not knowing they had to. Is a 5 October deadline almost nobody has heard of a reasonable ask, or a design fault in the system?
  2. The £1,000 reporting test is measured on sales before costs, adds every sideline together, and has not moved since 2017, though the government has said it will rise to £3,000 at some point in this parliament. Who does that catch hardest, and is it fair that someone making a loss still has to register?
  3. What would actually fix this: the £3,000 reporting threshold the government has promised but not yet dated, merging the two deadlines, or a real warning before anyone reaches the penalty stage? Do you have a client who was caught by the October registration date rather than the January one? If so, please give as much colour and detail as possible.

2 responses from the Newspage community

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Editor
Harvey Dhillon
Founder & CEO at Zmartly
Picture a videographer with two summer weddings and a few paid social posts. The £1,000 test counts what went into the till, not what was left in it. HMRC adds every trading sideline together, so £600 of filming plus £500 of posts crosses the line. Costs come off your tax bill, not the test, so it hits hardest where costs are high: the reseller buying stock, the parent baking cakes. A sideline that lost money still has to register. That is not fair. HMRC's 2023 research put 8.8 per cent of UK adults in the hidden economy, earning undeclared money. The top reason: the money was too small, so they did not know they had to declare it. A 5 October deadline for people who never heard of the rule is a design fault. The £3,000 reporting threshold would help, but has no start date. The real fix is a warning before a penalty. So add up your trading income for the year to 5 April 2026, before costs. If that beats £1,000 and you are new to Self Assessment, register by 5 October 2026.
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Editor
Matthew Knight
Chief Freelance Officer at Freelancing.Support
With a 10% year on year increase in redundancies, and more people being pushed into temporary self-employment, to cover their bills or increased cost of living, many who find themselves simply generating a necessary income, without any intention to 'start a business', find themselves falling into this knowledge gap. It's high time the UK government reviews the thresholds for self-assessment, and simplifies reporting for those with side hustles, interim or occasional untaxed income, rather than forcing everyone down the same road of administrative complexity.