The £1,000 Side Hustle Rule Explained — and Why HMRC's Filing Threshold Is Changing
Updated: Oct 24
Why this matters right now
If you're running a side hustle — selling on Vinted, freelancing, or creating content — HMRC has a specific rule about when you need to tell them. There's also a proposed change on the horizon, and it's easy to get the two mixed up.
The rule that applies today: £1,000
You can earn up to £1,000 a year from casual or side trading income completely tax-free, with no need to register or file. Once gross income goes over £1,000:
You need to register with HMRC as self-employed
You need to file a Self Assessment tax return
You pay tax and, where applicable, Class 2/4 National Insurance on the profit above the allowance
This applies to market stalls, freelance invoicing, affiliate links, brand sponsorships, or ad revenue alike.
What's proposed for the future: £3,000
The government has proposed raising the Self Assessment filing threshold to £3,000, targeted for around 2029 — expected to remove roughly 300,000 side-hustlers from the filing requirement. Crucially, this changes who has to file, not who owes tax — income above £1,000 would likely still be taxable even without an automatic filing obligation.
What to do today
If your side income is under £1,000 this tax year, no action needed.
If it's over £1,000, register for Self Assessment and file now — the £3,000 proposal is not yet law.
Keep records now regardless.
FAQ
Does the £3,000 threshold apply now? No. It's a proposal targeted for around 2029.
If the threshold rises to £3,000, will side income under that be tax-free? Not necessarily — tax would likely still be owed above £1,000.
I create content as a hobby — does it count? If you're earning money from it, HMRC generally treats it as trading income.
If you're not sure which side of £1,000 you're on, get in touch via Jackson Lee Accountants (https://www.jacksonleeaccountants.co.uk/contact-me).
Need a hand with this? We're accountants in Bury, and our self assessment tax return service covers it for a fixed fee.
Talk it through with us
If this affects you, book a free, no-obligation 30-minute chat by phone, Teams or at our Bury office, or see your fixed fee online in 2 minutes. Prefer to talk now? Call 0161 327 0047.
Sources: gov.uk: Getting your side hustle tax right (https://www.gov.uk/government/news/say-i-do-to-getting-your-side-hustle-tax-right) · IAB: Proposed tax return threshold increase (https://www.iab.org.uk/member-blog/proposed-tax-return-threshold-increase/)
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