HMRC takes aim at side hustles
People with side hustles are the target of a HMRC press release reminding them of their potential tax obligations. Why has this been published now, and what are the key points to remember?
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Accounting for VAT if there is no cash payment
Your business has submitted repayment returns for the last two quarters and you are concerned that you might have underpaid output tax on some supplies where no money has changed hands. Are your concerns justified?
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Treatment of distributions under review
The government has launched a consultation on modernising the tax treatment of distributions and repayments of capital by companies. The proposals could affect the distinction between dividends taxed as income and capital payments subject to CGT. What changes are being considered?
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Tax relief on equipment you haven’t paid for (yet)
The timing of tax relief for purchases of equipment isn’t straightforward when payments are delayed or goods are purchased through hire purchase (HP) agreements. How can you use these rules to your advantage and get tax relief before you’ve paid the final invoice?
HMRC is urging people earning extra income through side hustles to check whether they need to register for Self-Assessment, as the wedding season boosts demand for photographers, cake makers, content creators and other suppliers.
Anyone earning more than £1,000 a year from side hustles may need to declare their income. HMRC said the £1,000 trading allowance applies to total earnings across all side hustles, rather than each activity individually. It is encouraging taxpayers to use its free online checker to determine whether they need to file a tax return, though in our experience the results can be unreliable in many circumstances. New Self-Assessment customers for the 2025-26 tax year must register by 5 October 2026, with online returns and any tax due payable by 31 January 2027.
HMRC also stressed that not all additional income is taxable. Selling unwanted personal belongings generally does not need to be reported, but regularly selling goods for profit or providing paid services is likely to count as trading and may need to be declared.
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