Side hustle tax calculator

The checker adds up everything customers and platforms paid for side work in the year, before any costs or fees, and compares that total with the allowance. Inside it, full relief treats the whole profit as nil and the main result shows the room left. Over it, the result turns into a verdict with deadlines, two possible profits and the tax on the lower one.

That total is gross trading income, the receipts themselves rather than the profit (Income Tax (Trading and Other Income) Act 2005, section 783AC). The tax year runs from 6 April to 5 April. With the starting entry of £750 in sales and £150 of costs, the room left is £250.00. The costs do not change that figure at all.

Under full relief the profit or loss of the year counts as nil, and nothing goes on a return. HMRC's Business Income Manual shows a dog walker charging £15 a walk for 52 weeks, £780 in all, with £300 of costs. Without the allowance the profit would be £480.00; with it, there is nothing to report and £220.00 of room remains.

One allowance covers every side trade and casual job together. The online platforms guidance from HMRC adds the trades up before the test. So £800 from making content and £500 from selling crafts come to £1,300.00, £300.00 over the line.

Above the line, the taxable profit is the lower of two figures: receipts less £1,000, or receipts less the actual allowable expenses. Deducting the flat £1,000 is partial relief, and it only applies when the return makes an election for it (sections 783AH to 783AM).

HMRC's example of Joe has £1,300 of income and £800 of expenses. Actual costs leave £500.00, while the flat deduction leaves £300.00, so partial relief gives the smaller result. HMRC then sets £170 of earlier losses against it, ending at £130.00; the checker stops before that step.

Heavy costs reverse the choice. Receipts of £6,000 with £1,500 of expenses give £4,500.00 the actual way and £5,000.00 with the flat deduction, so expenses win. The two never combine: a person claiming partial relief deducts no expenses and no capital allowances.

The election can be made or withdrawn up to the first anniversary of the 31 January filing date. Full relief cannot create a loss either. When costs beat receipts inside the line, for example £900 against £600, using the loss needs registration and an election out of the allowance (section 783AL). The calculations behind these figures sit among the reference cases.

By 5 October 2027, for side receipts above £1,000 in 2026 to 2027. The date falls six months after the year closes on 5 April 2027 (Taxes Management Act 1970, section 7). GOV.UK's registration page sets the same 5 October date for every year.

Anyone asking how much can be earned before registering gets a short answer: £1,000 of gross receipts in a year, counted across every side activity together. Up to that figure, the trading allowance covers the income in full, there is no Self Assessment registration, no return and no tax on it.

Above that line, the earner tells HMRC by 5 October 2027 for the 2026 to 2027 year, normally by registering as a sole trader. The online return and any tax are then due by 31 January 2028. Profit can be worked out with the flat £1,000 deduction or with real costs, whichever leaves less. Some income never gets the allowance: payments from an employer, a partnership the person belongs to or a company they control count from the first pound.

Registration produces a Unique Taxpayer Reference (UTR), the number that identifies the person on every later return. GOV.UK's registration page explains the steps for a sole trader and for other side income.

Missing the date can bring a failure to notify penalty under Finance Act 2008, Schedule 41. It is a share of the tax paid late, smaller when HMRC is told before it asks, and lowest when that happens within a year. GOV.UK's penalties page lists separate charges for a late return and late payment.

Side profit sits on top of salary and pensions, so it is taxed at whichever band the combined income reaches. The checker works out the extra Income Tax the profit adds, which is why the salary field matters even though it never counts against the allowance.

GOV.UK's 2026 to 2027 rates give a Personal Allowance of £12,570 and a basic rate of 20% up to £50,270 of income. A higher rate of 40% applies above that, and 45% at the top. The allowance shrinks above £100,000 of adjusted net income. Scottish income tax uses 6 rates from 19% to 48% instead, on the same allowance.

Class 4 National Insurance is 6% on profits between £12,570 and £50,270 and 2% above. Class 2 is no longer compulsory. From a profit of £7,105, the Small Profits Threshold, it is treated as paid at no cost. Below it, £3.65 a week may be paid to protect State Pension and benefit rights.

The four cases below run through the checker; the first puts £900.00 of Income Tax on a £4,500.00 profit beside a £30,000 salary in England.

In the higher case, £18,000.00 of profit pushes income past £50,270, so most of it is taxed at 40%. Without other income, £9,000 of receipts and £500 of costs leave £8,000.00: no Income Tax, no Class 4, and Class 2 treated as paid. Take-home pay from the main job itself comes from the salary calculator.

No allowance applies at all when any of the side receipts come from certain connected payers (sections 783AO to 783AQ). The whole profit is then taxable, however small.

• The person's own employer, or the employer of their spouse or civil partner.
• A partnership the person is a partner in, or is connected with.
• A close company in which the person or someone connected is a participator.

The Business Income Manual's example of Jessica shows the effect. She earns £500 from her own partnership and £400 from another customer, £900 in all, and gets no allowance; the taxable profit is £900.00. Income under the Rent a Room Scheme, which has a relief of its own, is outside the allowance too.

Rent from property has a separate property allowance of £1,000, which stacks with the trading one. GOV.UK's page on both allowances sets the bands. Up to £1,000 of gross property income needs nothing, above it up to £2,500 means getting in touch with the tax office, and above £2,500 means registering. The checker places property income in its band but does not tax it.

Usually not, when the items are personal possessions. The GOV.UK platform guidance says such sales probably bring no Income Tax. Goods bought to resell, things made to sell, paid services and online content probably count as trading.

Clearing a wardrobe on Vinted or eBay is therefore different from buying stock to sell on Etsy. A valuable single item can bring Capital Gains Tax instead, which this checker does not cover. Casual income that is not a trade, such as one-off paid tasks, counts as miscellaneous income and shares the same £1,000 allowance.

When the answer is unclear, the tax office weighs the badges of trade listed in its Business Income Manual (BIM20205).

• A profit-seeking motive, and how many transactions there are.
• The nature of the asset, and whether it was changed or improved before sale.
• Similar trading done elsewhere, and the way the sale was carried out.
• How the purchase was financed, how long the item was held, and how it was acquired.

No single one of the badges of trade decides. The same manual treats the line between a trade and a hobby as a matter of fact and degree, judged on the whole picture.

Selling platforms now tell the tax office what their sellers earn. Under digital platform reporting, each reporting platform operator sends seller details and totals for every calendar year by 31 January after it. Sellers get the same figures, HMRC's online platforms guidance explains.

Sellers of goods with only a few low-value sales are left out of those reports, while services and rentals are always reported. A report is not a tax bill: the allowance test above stays the same whether or not a platform reports the seller.

A GOV.UK announcement from HM Treasury and HMRC in March 2025 said the reporting threshold for trading income would rise from £1,000 to £3,000. It promised the change within this parliament, with a simple online service. That rise is announced, not law. As checked on 15 October 2026, £1,000 is still the line, and the allowance itself is unchanged.

Making Tax Digital for Income Tax is a separate set of digital record-keeping rules. They have applied since April 2026 once qualifying income, meaning turnover from self-employment and property together, passes a threshold far above the allowance. That threshold falls in April 2027 and again a year later.

This side hustle tax calculator covers one tax year, 2026 to 2027, and one person. Several things that change a real bill are outside it.

• Losses brought forward or set against other income, and capital allowances on equipment.
• The annual maximum on Class 1 and Class 4 for people who are also employed; Class 4 is worked on the taxable profit after the allowance.
• Voluntary Class 2, which is shown but not deducted from what is kept.
• Student loan repayments, tax credits, the High Income Child Benefit Charge and Universal Credit, each with its own income rules.
• Property income tax, and rounding to whole pounds as Self Assessment does.

Records still matter inside the allowance, since they show the receipts stayed under the line. How long tax records are kept is covered by the record keeping checker.