Selling your bakes at the school fair. Tutoring on Saturday mornings. Making candles that have quietly turned into a little business. Side hustles are a lifeline for many mums, and a source of real pride.
But once money starts coming in, so do the questions. Do I need to tell HMRC? Will I have to pay tax? This guide gives you the basics in plain English.
Selling Your Things Is Not a Side Hustle
Clearing out the loft and selling old clothes, toys or furniture online is usually not trading, and you will not normally pay tax on it. Trading is when you buy or make things to sell for a profit, or provide a service for money, such as tutoring, cleaning or freelancing.
Online marketplaces now share information with HMRC about sellers who make a high number of sales, so it is worth knowing which side of the line you are on.
The £1,000 Trading Allowance
If your total income from trading is £1,000 or less in a tax year (6 April to 5 April), you do not need to tell HMRC or pay tax on it. That is your total income before costs, not your profit.
If you earn more than £1,000, you can either:
- deduct the £1,000 allowance from your income instead of your actual costs, or
- deduct your actual business costs, if they are higher
You cannot do both, so work out which leaves you better off.
When You Need to Register
If your trading income is more than £1,000 in a tax year, you need to register for Self Assessment. The deadline is 5 October after the end of the tax year in which you started. So if you went over the allowance in the 2025 to 2026 tax year, you need to register by 5 October 2026.
You then file an online tax return by 31 January and pay any tax due by the same date. Registering is free on GOV.UK.
Keep Simple Records From Day One
You do not need fancy software to start. A simple spreadsheet with these columns is enough:
- date
- what the money was for
- money in
- money out, and what it was spent on
Keep receipts for everything you buy for the business, photographed and saved in one folder on your phone. Future you, on a January evening, will be very grateful.
Bigger Businesses: Making Tax Digital
If your income from self employment and property grows above £50,000 a year, new Making Tax Digital rules mean you need to keep digital records and send HMRC quarterly updates using compatible software. The threshold is due to fall in future years, so it is worth knowing about if your side hustle is growing fast.
What About Universal Credit?
If you receive Universal Credit, you need to report self employed income. It may affect your payment. Check before you start so there are no nasty surprises.
What You Cannot Control
You cannot control how complicated the tax system feels. You can take it one step at a time, keep good records, and ask for help when you need it. HMRC’s website and helplines, and a local accountant, are all there to help.
Doing things properly is not a sign your side hustle is getting too serious. It is a sign you are building something real, and you deserve to be proud of that.
Read next: 20 Side Hustle Ideas for Mums in the UK, How to Make Money as a Mum in the UK: 15 Proven Ways and What It Actually Takes to Earn £500 From a New Side Hustle.
Building income around family life? The Working Mum Weekly brings you practical money and business tips every week. Sign up free. This post is general information, not tax advice.
