If your gross side-hustle income (sales before costs) is £1,000 or less in a tax year, you usually don't need to tell HMRC or pay tax on it. This is the trading allowance.
You can still use the allowance: deduct £1,000 from your sales instead of your actual expenses. Pick whichever gives the lower profit. You can't use both.
Sales £3,000, expenses £400. Using expenses gives a £2,600 profit; using the allowance gives £2,000. The allowance wins.
For example, income from a business you co-own as a partner, or from your employer or your spouse's employer. Check the GOV.UK guidance for the full list.
Work out your own figure: our UK Side-Hustle Tax Set-Aside 2026/27 spreadsheet (free lite version, or the full version for £4 on Payhip) calculates the extra tax and Class 4 NI on top of your PAYE salary.
Written with the help of an AI assistant and checked against GOV.UK on 21 Oct 2026. General information, not tax advice; if in doubt, contact HMRC or a qualified adviser.