So you have a side hustle?

So you have a side hustle? Do you know if you should be paying extra tax?

Let's talk about it!

Side hustles are becoming more and more popular and if you are earning over a certain amount, you may need to register with HMRC as a sole trader.

➡️ If you earn over £1,000 from your side hustle in a tax year (April to April), you may be 'trading' in the eyes of HMRC which means you need to start submitting tax returns, declaring that income and paying any additional tax that income generates.

As a sole trader, you're basically running a business. You need to start keeping records of all of your transactions (in and out) and you need to plan for any future tax bills. I recommend putting aside at least 30% of your profits for tax so that you can better manage any payments you need to make.

If you are falling into self-assessment for the first time, do not procrastinate in understanding your responsibilities. HMRC will apply late penalties and interest to any overdue returns and you can end up with a horrible bill.

As always, get in touch for a free chat if you need some help.