When to Register Your Side Hustle with HMRC

🎧 Listen Now: Sidehustles.co.uk One-Minute Podcast – When to Register Your Side Hustle with HMRC.

Transcript available below.

Do you need to pay tax on a side hustle? It's a question that might have crossed your mind if you've started a side hustle or are thinking about starting one. 

In the UK, you can earn up to £12,570 per year before you need to pay income tax. However, the UK tax system, with its intricate regulations and exceptions, can be quite complex. Keep reading below; we're here to answer your questions.

table of contents

• When Do You Need to Register with HMRC for Taxes?
• How Do You Register with HMRC for Tax Purposes?
• What Is the Time Limit for Registering with HMRC?
• FAQs
• Real-World Insight

If you earn over £1,000 in sales revenue from a side hustle in a single tax year, you must register for self-assessment with HMRC. The £1,000 trading income allowance is separate from the £12,570 personal income tax allowance. This allowance only applies to individuals, not partnerships, and doesn't cover any costs you may have incurred.

The trading income allowance is particularly beneficial for those who have a part-time job or receive income from platforms such as Uber, Deliveroo, gardening services, blogging, selling on Amazon or eBay or pursuing hobby businesses. This means you can earn up to £1,000 without having to pay tax on this income. The £1,000 threshold applies to total earnings (sales income) rather than profits made.

key takeaway

If you earn less than £1,000 in sales revenue from your side hustle in a tax year, you're not required to pay tax on it.

How to Register for Self-Assessment with HMRC.

1. Online Registration: The most straightforward way to register for self-assessment is through the HMRC website.
2. Required Information: You'll generally need a National Insurance (NI) number to register. If you don't have one, you can seek guidance directly from HMRC.
3. Alternative Methods: While the online method is recommended, you can also use form SA1 for registration. However, note that this form is usually not intended for self-employment income. Learn More
4. Confirmation: If you're unsure about the registration process, it's a good idea to consult the HMRC help line for clarification.
5. After Registration: Once you've successfully registered, HMRC will send you a ten-digit Unique Tax Reference (UTR) number. This process could take a few weeks.
6. Setting up Government Gateway: After receiving your UTR, you can set up a Government Gateway account to view your tax records online and submit your annual self-assessment tax return.

By following these steps, you can navigate the self-assessment registration process with HMRC more efficiently.

You must register with HMRC by the 5th of October in the second tax year of your side hustle. Failing to meet this deadline may result in penalties, such as late filing fees and interest charges. The tax year starts on the 6th April and ends on the 5th April each year.

For example, if you began working on the 1st of February 2023, you must register with HMRC by the 5th of October 2023.

✅ Read our comprehensive guide on side hustles and your tax obligations.

Determining when and how to register your side hustle for tax is just the tip of the iceberg. Navigating the tax maze can feel like a complex puzzle—even with the best information at hand, you might still miss a few crucial pieces. Don't leave your financial well-being to chance. Read our next article, "Our Comprehensive Guide on Side Hustles and Your Tax Obligations," to ensure that you're fully equipped to meet all your tax responsibilities. Get the full picture and make your side hustle a genuine success.

SIDE HUSTLES AND YOUR TAX OBLIGATIONS

🎧 Listen Now: Sidehustles.co.uk

One-Minute Podcast – When to Register Your Side Hustle with HMRC.

Welcome to the Sidehustles.co.uk One Minute Podcast. In the next 60 seconds, we're sharing a real-world insight from our network of seasoned side hustlers. This quick tip is designed to offer you practical advice that you can apply immediately in your side hustle journey.

Today, we're talking how and when to register your side hustle with HMRC. Here's a valuable tip. If you've started a side hustle or are considering one, you should know about the £1,000 Trading Income Allowance. This is a fantastic perk for UK residents dabbling in side businesses like blogging, Uber driving, or selling products online. In simple terms, if you make less than £1,000 in sales revenue from your side hustle in a tax year, you're not required to pay tax on it. This allowance is separate from your £12,570 personal income tax allowance, giving you even more room to earn tax-free. Just remember, this benefit is exclusively for individuals, not partnerships, and doesn't cover business expenses.

That's your one-minute real-world insight. Stay tuned for more!

https://www.gov.uk/self-assessment-tax-returns