Side hustle tax calculator (UK 2026/27)
Selling crafts, dog walking, tutoring, reselling, freelancing on the side? The first £1,000 of side-hustle income each tax year is tax-free. Above that, here's what you'll owe.
The first £1,000 of side-hustle (trading) income in a tax year is tax-free, and you don't need to tell HMRC about it. If your income is over £1,000 (before expenses), register for Self Assessment by 5 October after the tax year ends. You can then pay tax on your actual profit, or on your income minus the £1,000 allowance, whichever is lower.
Last checked: 4 October 2026 (GOV.UK).
How the £1,000 trading allowance works
- £1,000 or less of gross side income (before costs) in a tax year: it's tax-free, and you usually don't need to tell HMRC.
- More than £1,000: you must register for Self Assessment by 5 October after the tax year ends (for 2026/27, that's by 5 October 2027) and file a return.
- You then choose whether to deduct £1,000 or your actual costs, but not both. If your costs are over £1,000, claim the costs. This calculator picks the better option.
- The allowance covers all your trades combined. It doesn't apply to income from a partnership, or from your employer.
Is it a side hustle or just decluttering?
Selling your own unwanted things (clothes, toys, furniture) usually isn't trading, so there's no income tax to pay. Buying things to sell at a profit, or making things to sell, is trading. Check your Vinted or eBay situation with the Vinted & eBay HMRC calculator.
What about the "£3,000" threshold?
The government has said it plans to raise the threshold for reporting trading income through Self Assessment from £1,000 to £3,000, with a simpler online service instead. That isn't in force yet. For now the £1,000 rule above still applies, and the tax-free allowance itself stays at £1,000.
Tax on side income above the allowance
Side profits are added to your salary and taxed at your normal rate: 20% (basic), 40% (higher) or 45%. Class 4 National Insurance (6% between £12,570 and £50,270 of profits) only applies if your side profits alone are over £12,570. Student loan repayments may also apply on side income above your plan's threshold.
Sources: GOV.UK trading and property allowances, register for Self Assessment. This calculator assumes England, Wales or NI tax rates and the standard Personal Allowance. It's a guide, not tax advice.
Free calculator: Self-employed tax calculator, if it's your main income
Have every number ready for your tax return, sorted into HMRC's categories.
Income and expenses logs with HMRC categories, mileage, use of home, an estimate of income tax and Class 4 NI, and year-to-date MTD quarterly totals.
Get it for £7 →See your real profit per item, and where you stand on the HMRC thresholds.
Profit per item, own items vs resale, per-platform counts against the HMRC reporting thresholds, a £1,000 trading allowance check and a stock list.
Get it for £5 →Rent, costs and mortgage interest per property, with year-to-date totals for each MTD quarterly update.
Up to 6 properties with your ownership share, rent and expense logs in HMRC-style categories, year-to-date MTD quarterly totals, actual expenses vs the £1,000 property allowance, and your tax at 2026/27 rates and the new 2027/28 property rates (22% / 42%).
Get it for £6 →All 10 paid templates (worth £54) for £15: £1.50 each.
Every paid Tidy Life template in one download: budget, bills, debt, Self-Assessment, landlord & MTD, Christmas, January reset, Vinted, house move, meal plan and job hunt.
Get it for £15 →FAQs
Do I pay tax on a side hustle under £1,000?
No. If your total gross side-hustle income (before costs) is £1,000 or less in a tax year, the trading allowance covers it and you usually don't need to tell HMRC.
When do I need to register for Self Assessment for a side hustle?
When your gross trading income goes over £1,000 in a tax year. Register by 5 October after the end of that tax year, so by 5 October 2027 for income earned in 2026/27.
Can I claim expenses and the trading allowance?
No. It's one or the other: deduct the £1,000 trading allowance or your actual allowable expenses, whichever is bigger.
Kit list: Home office kit for sole traders: what you can claim and what to buy. (Our page. It includes Amazon affiliate links.)
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