The thought of submitting tax for your side hustle might feel overwhelming – but it doesn’t have to be! Do you have a successful side gig? Have you just begun? Are you thinking of starting up, but aren’t sure about the potential tax implications? Make sure to read on to learn about the Income Tax Self Assessment (ITSA) process, and whether you might need to submit your tax return for your side hustle this year!
What is Self Assessment?
Self Assessment is a system created by HMRC for people to report taxable income beside their automatically tax-deducted wages or pensions. In other words, it is a form of Income Tax. Self Assessment is an obligatory tax return, and you must submit it – if it is applicable to you.
Who needs to submit Self Assessment?
If you are already working a job with a taxable salary, it is likely that your employer has been taking care of Income Tax for you. However, your side hustle is your own business and requires additional attention. If you have earned more than £1,000 (before tax relief) in the last tax year as a “sole trader”, then you must submit your Self Assessment before the relevant deadline.
You may also have to register to declare other untaxed income, such as income from renting out a property, or earnings through savings (interest) and investments. HMRC provides an online questionnaire to check if you are required to send a Self Assessment tax return.
When do I need to submit my Self Assessment?
If you need to submit a Self Assessment tax return, but you haven’t previously submitted one, then you must notify HMRC before 5 October of the relevant tax year. You can do this by registering for Self Assessment. The usual date for paying your tax bill is 31 January (don’t forget to keep records of your business finances beyond this date, though).
How do I submit a Self Assessment tax return?
Your Self Assessment tax return can be submitted online; alternatively, you can call HMRC to request a paper form to be sent to you by post. However, the paper option is generally not recommended, especially as a long-term approach, due to the ongoing and upcoming Making Tax Digital (MTD) legislative reforms.
MTD is requiring ever more taxpayers to keep digital records and submit their returns online – don’t forget to prepare for the next MTD reform in April 2026, and consider using AbraTax’s HMRC-recognised bridging software to make the process smoother!
Conclusion
In this article, we have outlined the essentials regarding Income Tax Self Assessment (ITSA) for side hustlers. They key to successful and healthy finances is having the right knowledge and applying it consistently. Don’t forget to avoid common errors and make sure to keep watertight records of your business finances. If you’re considering starting a side hustle but not sure how to go about it, check out our articles Turn Your Hobby into Extra Income and Top 5 Side Gigs to Increase Wealth for inspiration!
Whether it’s your first time or your twenty-first time, the question of submitting tax can be daunting, and it’s easy to make errors along the way. Why not consider AbraTax as a user-friendly and HMRC-recognised alternative to help you organise and maintain your tax obligations?