Tax on Second Jobs and Side Hustles in the UK (Updated 2025 Guide)

If you earn extra income on top of employment, whether it’s selling online, freelancing in the evenings, or running a small weekend business, it’s important to understand how HMRC expects you to handle the tax.

There’s a lot of confusion around “second job tax,” especially for side hustles. Does it get taxed more? Do you need to tell HMRC? How do you work it out if you’re employed and self-employed?

We'll break down what you need to know, with practical examples, so you can stay on the right side of the rules and avoid surprises later.

How HMRC Sees Your Income: It’s All Combined

HMRC doesn’t care whether you call it your main job, second job, side hustle, or beer money. For tax purposes, all your taxable income is added together to work out which tax bands apply.

Your PAYE job has tax deducted at source. Your side income does not; you’re responsible for reporting it.

Example:

• PAYE salary: £30,000

• Side hustle profit: £5,000

• Taxable income = £35,000

You’ll pay tax based on that total. If your combined income crosses a threshold, some of it may be taxed at a higher rate.

Common Side Hustles That HMRC Counts as Taxable

People often ask:

👗 “Do I pay tax on selling clothes on Vinted?”

💍 “If I make jewellery and sell it at markets, do I need to register?”

📸 “I freelance evenings and weekends, is that separate?”

💻 “Do I need to tell HMRC about my Etsy sales?”

If you're regularly making money (even small amounts), HMRC considers it trading. Even side income that seems casual is taxable if you’re making sales with the intention of profit.

Examples HMRC expects you to declare:

• Selling products online (eBay, Vinted, Etsy)

• Market stalls or pop-ups

• Freelance design, writing, consulting

• Teaching or tutoring for pay

• Photography jobs

• Cleaning or handyman services on weekends

If you're earning with the intention of profiting, you need to consider taxes.

What About the £1,000 Trading Allowance?

There is one useful threshold: the trading allowance.

If your total trading income (not profit) is £1,000 or less in a tax year, you don’t have to register for Self Assessment or pay tax on it.

If you earn more than £1,000 from self-employed work, even by £1, you must register and declare all of it.

Example:

• You sell second-hand clothes online for £800 = No need to register.

• You sell crafts at markets and make £1,200 = Must register and declare it.

It’s important to note this is turnover, not profit after expenses.

Want to read more? "What Happens If You Don’t Declare Side Hustle Income to HMRC?"

How to Register for Self Assessment

If your side hustle passes £1,000 in turnover, you’ll need to:

• Register for Self Assessment with HMRC

• File an annual tax return declaring all your self-employed income and expenses

The deadline to register is 5 October, after the end of the tax year in which you went over £1,000.

Example:

• You start side income in June 2024

• Earn £1,500 in the 2024/25 tax year

• Register by 5 October 2025

The filing deadline is 31 January following the end of the tax year.

Do You Pay More Tax on a Second Job or Side Hustle?

Another common question is, “Do I pay extra tax because it’s a second job?”

No. There isn’t a “second job tax rate.”

What happens is that your side income is added on top of your PAYE salary, which might push your total income into a higher tax band.

Your personal allowance (£12,570) is usually used up by your PAYE salary. Any additional income from your side hustle is taxed at the appropriate rate:

• 20% (basic rate)

• 40% (higher rate)

• 45% (additional rate)

Example:

• PAYE income = £30,000

• Side hustle profit = £5,000

• Total = £35,000 taxed mostly at 20%

If your combined income exceeds £50,270 (2025/26 threshold), the portion over that is taxed at 40%.

HMRC’s Self Assessment tax calculator can help estimate what you’ll owe.

Record-Keeping: Don’t Leave It to Memory

If you’re self-employed, even part-time or on the side, you’re expected to keep clear, accurate records.

You’ll need to record sales/income (including online marketplaces), expense receipts for anything claimed and mileage logs if claiming vehicle costs.

This isn’t optional. HMRC can ask to see your records for years after filing.

Tip:

• Keep digital copies of receipts, and photos are fine if they’re legible.

• Use a separate business account to avoid mixing personal spending with business income.

Key Takeaways for Anyone with a Side Hustle

✔️ HMRC adds all your income to determine your tax band.

✔️ Over £1,000 turnover? You must register for Self Assessment.

✔️ There’s no special second-job rate, just your combined taxable income.

✔️ Good records aren’t optional; they protect you if HMRC ever asks.

✔️ Plan ahead so you’re not surprised by your tax bill.

Need Help Getting Your Books in Order?

At Strive, we help business owners, sole traders, and side hustlers stay organised and compliant.

If you want clear, reliable bookkeeping that makes tax time predictable instead of stressful, get in touch.

📩 Talk to us about keeping your finances in shape, so you can run your side hustle stress-free!