HMRC has reiterated the October 5 deadline for people who need to tell the tax authority about untaxed income from a side hustle. For anyone earning money through freelancing, reselling, tutoring, delivery work, content creation, pet sitting, online services, or marketplace sales, this is not merely a calendar reminder. It is a signal to separate a casual activity from a taxable trading business before a missed administrative step becomes a penalty, a rushed tax return, or an unexpected bill.
The key point is often lost in headlines: October 5 is generally the deadline to notify HMRC that you need to complete Self Assessment for income earned in the previous tax year. It is not automatically the deadline to file your tax return or pay your tax. But if you wait until January to think about it, you may already have missed the notification deadline.
Why the October 5 deadline matters
The UK tax year runs from April 6 to April 5. Therefore, for side-hustle income earned during the 2025/26 tax year, the relevant notification deadline is October 5, 2026. If you have taxable income that has not already been taxed through PAYE, you may need to register for Self Assessment by then.
After registration, most people filing online have until January 31, 2027 to submit their 2025/26 Self Assessment return and pay any tax due. That later filing date should not create false comfort. Registering early gives HMRC time to issue the necessary credentials, and it gives you time to verify your numbers rather than estimating them at the last minute.
For a side hustler, the practical risk is not always a large initial tax bill. It is poor recordkeeping. Someone who has taken payments through PayPal, Stripe, Vinted, Etsy, Airbnb, TikTok, bank transfer, or cash may know roughly what they made, but HMRC expects figures that can be supported. Once several platforms, refunds, fees, mileage costs, and purchases are involved, “roughly” stops being a reliable tax method.
The £1,000 trading allowance: useful, but widely misunderstood
The first question is whether your activity exceeded the UK’s £1,000 trading allowance. In broad terms, if your total gross trading income for the tax year is £1,000 or less, you may not need to tell HMRC about it or file Self Assessment solely because of that activity.
The word gross is essential. It means total receipts before subtracting expenses.
If you earned £1,250 from dog walking but spent £400 on transport, treats, insurance, and supplies, your gross income is still £1,250. You cannot say you were below the allowance because your profit was £850. The allowance is tested against income, not profit.
Once gross trading income exceeds £1,000, a tax return may be required. You can normally choose between claiming the £1,000 allowance or deducting your actual allowable business expenses. The better option depends on your records and costs:
- A digital template seller with £3,000 in sales and £150 in platform fees may find the £1,000 allowance more valuable.
- A freelance photographer with £5,000 in income and £2,200 in legitimate equipment, travel, editing software, and insurance costs may be better off claiming actual expenses.
This is why a side hustle should not be managed based on a single social-media rule such as “under £1,000 means tax-free.” The allowance can reduce taxable profit, but it does not replace the need to understand whether your activity counts as trading, whether other income must be reported, or whether a different tax rule applies.
Selling personal belongings is not always a side hustle
A person decluttering used clothes, furniture, or household items is not necessarily running a trade. Selling unwanted personal possessions at a loss is different from buying goods to resell for profit, making products regularly, or providing a service for payment.
The dividing line is the commercial pattern: frequency, intention to make a profit, organization, and whether you are actively sourcing or producing items for sale. Marketplace reporting requirements and tax obligations are also not the same thing. A platform sharing data with HMRC does not automatically mean tax is owed; equally, not receiving a platform notice does not mean income is exempt.
What side hustlers should do before October 5
The most effective response is a short compliance review, not panic. Start with the 2025/26 tax year and work from evidence rather than memory.
1. Total every income stream
Download annual transaction histories from marketplaces, payment processors, and business bank accounts. Include cash payments, deposits, tips, affiliate commissions, sponsorship income, and direct invoices. Do not rely only on the amount transferred into your main bank account after a platform deducts fees.
Create one total for gross income and a separate list of refunds or cancelled sales. This immediately shows whether the £1,000 threshold may be relevant.
2. Categorize expenses and retain proof
Keep receipts, invoices, mileage logs, and platform fee statements. Allowable expenses generally need to be incurred wholly and exclusively for the business. Common examples include marketplace fees, business insurance, advertising, software subscriptions, packaging, stock, and a business portion of phone or internet costs.
Be cautious with mixed personal and business purchases. A laptop used for both a day job and freelance work, for example, may require a reasonable business-use allocation rather than a full deduction. Claiming an expense because it feels connected to your hustle is not the same as it being allowable.
3. Decide whether you need to notify HMRC
If your gross trading income was above £1,000, or you otherwise have untaxed income to report, check whether you need to register for Self Assessment. People already in Self Assessment may not need to register again, but they still need to include the relevant income on their return.
If you are unsure, use HMRC’s guidance or speak to a qualified UK tax adviser. This is particularly worthwhile if you combine employment with self-employment, have rental income, receive overseas income, or operate through a limited company.
4. Set aside cash for the January bill
Tax is based on profit, not turnover, but it should still be funded as you earn. A sensible habit is moving a percentage of each payment into a separate savings account. The right percentage depends on your employment income, expenses, and tax band; there is no universal figure.
Also plan for payments on account. If your Self Assessment tax bill passes the relevant threshold, HMRC may ask for advance payments toward the following year’s bill. New sole traders are often surprised because the first January payment can cover the previous year’s tax plus an advance installment for the next year.
The bigger shift: treat your hustle like a small business
The October 5 deadline is part of a broader change in how side income should be approached. A few occasional invoices can become a regular business faster than expected, especially where digital platforms make payment frictionless and record a clear audit trail.
For higher-income self-employed people and landlords, Making Tax Digital for Income Tax is also beginning to affect how records and reporting are handled. It is separate from the October 5 notification rule, but it reinforces the same operational lesson: digital, contemporaneous records are safer than reconstructing a year from messages and bank statements.
The practical goal is not to make a side hustle feel bureaucratic. It is to protect its profit. A simple dedicated bank account, monthly income-and-expense review, saved receipts, and a tax reserve can prevent compliance errors while showing whether the hustle is actually worth scaling.
FAQ
Often, no, if your total gross trading income was £1,000 or less and you have no other reason to complete Self Assessment. However, circumstances vary, and the threshold refers to gross receipts before expenses. Check HMRC guidance if you have other untaxed income or are uncertain whether your activity is trading.
Is October 5 the deadline to pay tax on my side hustle?
No. October 5 is generally the deadline to notify HMRC that you need Self Assessment for the prior tax year. For most online filers, the deadline to file the return and pay the tax is January 31 following that October deadline.
Does selling on eBay, Vinted, or Etsy automatically mean I owe tax?
No. Selling unwanted personal items is different from trading. But regularly buying or making goods to sell for profit can amount to trading, and gross sales above the £1,000 allowance may create reporting obligations.
What happens if I miss the October 5 deadline?
Contact HMRC as soon as possible rather than waiting. A late notification can lead to penalties, although the outcome depends on the facts, tax due, and how promptly you correct the issue. Early action and accurate records put you in a stronger position.
Source: Birmingham Live — Fri, 11 Sep 2026 16:00:00 GMT
