Page 12 - Town & Around - May 2025

12 Town & Around May 2025 Tel: 01485 540620 email: editor@townandaround.net
DO YOU HAVE A ‘SIDE HUSTLE’? HOW IS IT TAXED?
By Kathryn Gigg Chartered Accountants, Hunstanton
ne of the consequences of the changing economy is that
openings have for some years been appearing for ‘side hustles’
O– a way of earning some extra money outside the normal
environment of employment. There is an enormous range of
opportunities ranging from selling one’s old and unused possessions
on eBay to full time online trading where goods are bought in bulk and
sold on to create a profit, and it is sometimes hard for a “hustler” or
someone with a “side gig” to know when HMRC need to be involved.
One of the consequences of the IT revolution is that HMRC now
have access to hundreds of databases including those of online trading
platforms so in some cases they will know more about the “side gig”
(and particularly about the gross income) than you think – for example
the online trading platforms will be providing HMRC with details of
all those accounts selling more than 30 items a year.
In February HMRC issued some quite detailed guidance, identifying
five key areas of interest:
• Buying or making things to sell N.B. Article written March 2025
• A ‘side gig’ – e.g. driving or delivering outside your main job © Kathryn Gigg Chartered Accountants 2025
• Self-employment with multiple jobs
• A ‘content creator or influencer’ making money for social posts or Caution: The information listed above is for general guidance only.
vlogs. You should neither act, nor refrain from action, on the basis of any
• Renting out property. such information. You should take appropriate professional advice
All these categories are likely to have a tax consequence. As a on your particular circumstances because the application of laws and
general rule, any activity carried out ‘with a view to profit’ is subject regulations will vary depending on particular circumstances and
to tax. There is a limited relief where turnover from a trade or self- because laws and regulations undergo frequent change. Whilst we
employment is below £1,000, but it is important to note that this endeavour to ensure that the information contained herein is correct,
threshold relates to gross takings, not profit, and the £1,000 applies to neither we nor our firm shall be liable in damages (including, without
total income, not each source. Similarly, there is an allowance for gross limitation, damages for loss of business or loss of profits) arising in
rental income of £1,000 (which relates to total rents from all sources, contract, tort or otherwise from any information contained in it, or from
not per property) and a rather more generous £7,500 ‘Rent-a-room’ any action or decision taken as a result of using any such information.
relief where part of your main residence is shared. Beyond these limits
the income is taxable, and it is necessary to register the self-
employment. Failure to do so can lead to interest, penalties and even
worse, the stress of dealing with an HMRC enquiry.
On 12 March 2025 HMRC announced that the limit over which a
‘side hustle’ needed to be declared in a formal tax return would
increase to £3,000 “by the end of this parliament”, but it is unclear
whether this means that the exemption will be increased or whether
there will be a “simplified return” for such additional income only.
We are currently seeing an increasing number of clients with ‘second
incomes’, some of which have reached a size where they become full
time work. It is vital that you keep proper records from the outset. If
you are just casually selling unwanted belongings from time to time
it’s unlikely you’ll need to pay any tax on it, but buying and selling to
make money is a different matter and needs to be taken seriously – it
is always better to tell HMRC than to wait for them to came knocking.
If you require any tax advice, whether personal or business, please
contact either Kate or Nic at Kathryn Gigg Chartered Accountants,
Hunstanton on 01485 534800 or kate@kathryngigg.co,uk.