HM Revenue and Customs (HMRC) is urging those who work in Britain’s “hidden economy” to check their tax obligations.
The UK’s tax authority said £2bn in unpaid tax had been generated by secret side hustles – including dog walking, selling clothes online and online content creation.
HMRC has now launched an awareness campaign Help for Hustles, offering guidance for those earning extra income in five key areas.
Angela MacDonald, HMRC’s second permanent secretary and deputy chief executive officer, said: “We know many people are turning their hobbies and interests into successful businesses and we’re here to help them understand their tax obligations.
“Nobody wants an unexpected tax bill, so anyone with a side hustle should check HMRC’s straightforward guide and make sure they’re getting their tax right.”
If someone has earned more than £1,000 from their side hustle in a tax year, they may need to complete a self-assessment tax return.
People can check if they need to tell HMRC about additional income on GOV.UK.
Tax officials say this only applies to people who are trading or selling services.
If someone is simply clearing out their unwanted items and putting them up for sale, they will not need to pay tax.
Undeclared income from side hustles forms part of the hidden economy, HMRC said.
It says it is committed to reducing the tax gap, of which the hidden economy accounts for around £2.2 billion.
According to research commissioned by HMRC and published in 2023, one in 10 people in the UK are operating in the hidden economy with 65% of these individuals most likely operating side hustles and largely unaware that they should be registered for tax.
Anyone generating more than £1,000 from their side hustle should check their tax obligations using HMRC’s online guide.
HMRC’s Help for Hustles guide covers five key areas to help people understand any tax obligations:
- I’m buying or making things to sell
- I’ve got a side gig
- I work for myself doing multiple jobs
- I’m a content creator or influencer
- I rent out my property
