HMRC has issued a fresh alert reminding anyone with a “side hustle” to check whether they are required to register for Self Assessment and file a tax return for the tax year 2024–25. In its press release published on 25 June 2025, HMRC emphasises that early action helps manage tax liabilities, avoid penalties, and allows the use of digital services to make the process smoother.
This blog will explain what this means, provide practical guidance, and ensure your extra income activities don’t create avoidable stress.
What does the HMRC alert cover?
1. Who should take notice?
HMRC’s alert applies to anyone earning more than £ 1,000 in a tax year from non‑PAYE sources like online sales, service-based work, property letting, or crypto activities.
2. Simplified checklist
- Sold goods on platforms (eBay, Etsy, Vinted)
- Provided services (tutoring, dog-walking, pet-sitting)
- Rented property (short or long-term)
- Received income or gains from cryptoassets
3. Why £1k matters?
This is the HMRC trading allowance. Any income exceeding £1,000 must be declared via Self Assessment.
4. Key deadlines
- Register by 5 October 2025 if it’s your first Self Assessment.
- File online by 31 January 2026, which is also the due date for any tax owed.
5. Penalties
- Miss the filing deadline → £100 fine.
- 3 months late → £10 daily, up to a maximum of £900.
- Further delays can trigger additional charges and interest.
6. Benefits of early filing
- You’ll know your tax owed in plenty of time.
- You can spread payments using HMRC’s Budget Payment Plan.
- Avoid the infamous January rush.
Step-by-step guide for side hustlers
1. Check if you need to file
Use HMRC’s Self Assessment checker tool to see if your income exceeds the £ 1,000 threshold. This tool applies across activities, including crypto.
2. Register for Self Assessment
- Sign up by 5 October 2025 via the GOV.UK website.
- Receive your Unique Taxpayer Reference (UTR) by post (allow 20 working days).
- Activate your Government Gateway account.
3. Gather your documents
- List all income (gross receipts) and allowable expenses.
- For crypto-related income or gains, use the new dedicated sections on the return.
- Use tools or spreadsheets to track income and costs, especially if you’ll soon join Making Tax Digital (MTD).
4. File your return
- Payment isn’t due at filing time — you have until 31 January 2026 to pay.
- Use GOV.UK online services, which let you save progress.
5. Plan your payment
- Use the Budget Payment Plan to spread payments via direct debit.
- HMRC allow instalments without penalties if set up early.
6. Prepare for MTD (if applicable)
- Sole traders or landlords earning over £ 50,000 must start MTD for Income Tax from April 2026.
- That means maintaining digital records and submitting quarterly updates using HMRC-compatible software.
Why is acting now smart?
- Avoid penalties – Stay ahead to sidestep the £100 or escalating fines.
- Cashflow control – Budget early and avoid hefty lump sums at year-end.
- Reduced stress – Filing early is calm; January is chaotic—don’t dive in late.
- Digital readiness – Start tracking digitally now, and MTD will be a natural evolution.
- Crypto clarity – New return sections ensure you report crypto income and gains correctly.
Key considerations for side hustlers
1. Trading vs Non‑trading
Determine whether your side activity qualifies as a business or merely an occasional income source.
Casual selling—like clearing out old clothes or books—isn’t taxable. But if you’re making regular or profitable sales (e.g. online shops), it likely counts as trading. The £1,000 trading allowance only applies to income from these business-like activities.
2. Crypto rules
Crypto income is taxable and is now tracked more closely by HMRC.
New sections in the tax return form require you to report income and gains from cryptoassets. This includes profits from selling, staking, lending, or even receiving crypto as gifts.
3. Platform reporting
Online platforms are sharing seller data directly with HMRC.
Websites like eBay, Vinted, Etsy, and Airbnb now report your income to HMRC. If your records don’t match what these platforms report, it could trigger an enquiry. Always ensure your tax-year records are up to date and accurate.
How 3E’S can help you?
While some side hustlers manage their own taxes, many find it beneficial to engage an accountant. We offer:
- Free initial tax check-ups to see if you need to register for Self Assessment.
- Registration support, including GOV.UK submission, UTR, and Gateway setup.
- Record‑keeping advice and help choosing software for MTD compliance.
- Annual tax return preparation—professional, accurate, and on time.
- Payment planning, including an instalment strategy through HMRC’s Budget Payment Plan.
- Crypto support, ensuring correct reporting on newly expanded HMRC forms.
- Ongoing advice, ready for any future HMRC updates.
Tips to keep you ahead
1. Review your earnings
Check your total side income as early as possible. If it’s over £1,000, you’ll need to register for Self Assessment. Aim to file your tax return by autumn instead of waiting until the January rush.
2. Track every transaction
Keep detailed records of:
- Income from all platforms or clients
- Platform/service fees
- Costs of materials, mileage, packaging, and other expenses.
Accurate tracking ensures you claim all allowable expenses and stay compliant.
3. Set aside a tax buffer
- Save around 20–30% of your side income for tax
- Helps you avoid a cash crunch when payment is due in January
4. Talk to an advisor early
Speaking to an accountant now means:
- No last-minute pressure
- You get guidance on deductions, crypto rules, and HMRC updates.
5. Stay informed on tax changes:
- Sign up for HMRC newsletters.
- Ask your advisor about changes like Making Tax Digital.
- Being informed helps you plan better and stay ahead of penalties
Example
Let’s say you generate £ 3,000 from crafting and selling on Etsy:- Registering now for your Self Assessment—well before the October deadline, if this is your first time—gives you time to organise costs and choose the right software.
- You file by late November, knowing your tax is around £600.
- A Budget Plan lets you pay £50/month from December to mid-January—calm and manageable.
- No Jan 31 panic. No £100 fine.
Final thoughts
HMRC’s June 2025 reminder is more than a routine nudge—it reflects tighter digital oversight over side hustles, property rentals, and crypto income. Meeting the £ 1,000 threshold means Self Assessment is essential. Failing to file by 31 January 2026 carries real penalties.
Early action provides you with peace of mind, financial control, and a head start on digital compliance. At 3E’S, we specialise in helping side hustlers like you stay compliant without the stress. Whether it’s registering, filing, or planning payments, we’re here year-round. Get in touch today for a consultation and ensure your side hustle stays both profitable and tax-compliant.
