In today’s world many taxpayers are seeking to ease the burden of the cost of living crisis by taking on a side hustle – a secondary way of earning income through the provision of items or services at a low level. This might be anything from an online shop to content creation or dog walking. Gains or income made through cryptoassets are also classed as a side hustle for tax purposes.
HMRC has recently urged anyone earning more that £1,000 from their side hustle to register for Self Assessment and keep track of their earnings in preparation for filing a tax return. This is to ensure they have plenty of time to get their tax affairs in order and submit their returns on time.
According to research published in 2023, one in 10 UK individuals are operating in the hidden economy, 65% of whom are likely earning through side hustles and unaware that they should be registered for tax.
Do you need to register for Self Assessment?
Those who are unsure if they meet the criteria can use a checker tool on the government website. This will inform them whether a Self Assessment is necessary; if so, they will need to register to receive a Unique Taxpayer Reference and begin the process.
It’s particularly important for individuals who hold cryptoassets to check their tax status. They may need to declare income via their Self Assessment or pay Capital Gains on any cryptoassets that have been sold, exchanged or gifted. The 2024-25 Self Assessment form introduces a new, dedicated section for declaring cryptoassets separately from Capital Gains and Trusts and Estates.
Why file your Self Assessment now?
HMRC is always keen to encourage taxpayers to file their Self Assessment before the deadline of 31 January. This ensures taxpayers have plenty of notice regarding how much tax is due and can make payment before the deadline, which is also 31 January.
Myrtle Lloyd, HMRC’s Director General for Customer Services, said:
“Whether you are selling handmade crafts online, creating digital content, or renting out property, understanding your tax obligations is essential. If you earn more than £1,000 from these activities, you may need to complete a Self Assessment tax return.
“Filing early puts you in control – you will know exactly what you owe, can plan your payments, and avoid the stress of the January rush. You don’t need to pay immediately when you file – you have until 31 January to settle your tax bill.”
The deadline for filing a Self Assessment for the 2024-25 tax year is 31 January 2026. Early preparation is particularly important for sole traders and landlords who have a qualifying income of £50,000 or more, since they will also need to prepare for the rollout of Making Tax Digital in April 2026.
If you’re unsure whether you need to register for Self Assessment, or you need help with filing your tax return, get in touch with a reputable accountant today.
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