Many creative professionals in North London now juggle a second income alongside their main employment to make ends meet. Perhaps you’re photographing weddings at weekends, designing graphics after your day job ends, or teaching music lessons in the evenings? If so, understanding your tax obligations is essential. This guide explains everything creative freelancers need to know about managing self-assessment for their side hustle tax.
Understanding side hustle tax in the UK: what counts as taxable income?
Not every side activity triggers a tax bill, but HMRC draws clear lines between genuinely selling unwanted personal items and running a taxable creative side hustle.
The key threshold is the £1,000 trading allowance. If your total income from all side hustles combined is £1,000 or less in a tax year, you don’t need to register for self-assessment or pay tax on this second income. However, this threshold applies across all your activities combined, not for each side hustle. If you earn £600 from freelance photography and £500 from selling artwork online, your total is £1,100, which exceeds the allowance and requires registration.
HMRC considers you to be trading when you’re working with the intention of making a profit. For creative professionals, this includes commissioned photography, graphic design projects, music tuition, videography work, sponsored social media posts, selling prints or artwork, and freelance writing. The frequency and regularity matters. Occasionally selling old equipment won’t trigger tax, but regularly taking on paid creative projects will.
When you need to register for self-assessment
Once your freelance side hustle earnings exceed £1,000 in a tax year, you must register for self-assessment with HMRC. The registration deadline is 5 October following the end of the tax year when you first started earning over this threshold.
What happens next?
After registration, you’ll receive a Unique Taxpayer Reference (UTR) needed for filing. The self-assessment tax return deadline is 31 January following the end of the tax year, and any tax owed must be paid by this same date. Missing either deadline triggers automatic penalties starting at £100 for late filing.
If you’ve already earned over £1,000 from your creative side hustle but haven’t registered yet, contact HMRC as soon as possible. Being proactive about declaring previously undeclared income typically results in lower penalties than waiting for HMRC to contact you.
A change to the reporting threshold
The government has announced plans to increase the reporting threshold to £3,000 with a simplified online reporting system by 2029, taking around 300,000 people out of full self-assessment (but you’ll still pay tax if your income exceeds £1,000). However, until these changes take effect, current rules apply.
What is the HMRC side hustle tax crackdown?
From January 2024, digital platforms including eBay, Etsy, Vinted, Airbnb, Deliveroo, and Uber became legally required to report sellers’ earnings to HMRC. Platforms must report your details when you exceed either 30 transactions per calendar year or earn approximately £1,700 per year on their platform. The first reports covering 2024 activity were delivered to HMRC by 31 January 2025. This isn’t a new tax, simply enhanced enforcement of existing rules through better data collection.
If you’re worried about how this could affect your income and tax situation, drop us an email on info@greenandpeter.co.uk or call 020 8446 8100 for a no-obligation chat.
Calculating your tax on second income from creative work
Your side hustle profits (income minus allowable expenses) are added to your employment income to determine your overall tax band. For 2024/25, income tax rates are 20% (basic rate on income up to £50,270), 40% (higher rate on income between £50,270 and £125,140), and 45% (additional rate above £125,140). The personal allowance of £12,570 applies to your total income from all sources.
On top of income tax, you’ll pay Class 4 National Insurance on your self-employment profits at 6% on profits between £12,570 and £50,270, then 2% on anything above £50,270. Class 2 National Insurance was abolished from April 2024, though you can make voluntary weekly contributions of £3.45 if your profits are below £6,725 to protect your state pension entitlement. (Figures correct for tax year 2025/26).
What does it look like in practice?
Here’s an example: a North London photographer earning £35,000 from their main job with weekend wedding photography bringing in £10,000 in the tax year. After claiming £2,000 in allowable expenses for equipment, travel, and marketing, the taxable profit from the side hustle is £8,000.
Total income is £43,000 (£35,000 + £8,000 profit), keeping them in the basic rate tax band. On the £8,000 side hustle profit, they’d pay approximately £1,600 in income tax (20%) and £480 in Class 4 NI (6%), totalling around £2,080. Without deducting the £2,000 in expenses, they’d be paying tax on £10,000 instead, costing an extra £520.
Essential record-keeping for creative side hustles
HMRC expects you to maintain detailed records of all income and expenses. How long you need to keep these records depends on when you file your return. The HMRC website gives up to date information on how long to keep documents for tax.
Key records to maintain:
- Income records: Every payment received with date, amount, client/platform name, and description
- Expense receipts: Keep digital or paper receipts for all business expenses. Use receipt scanning apps or smartphone photos
- Platform reports: Download transaction reports regularly from Etsy, PayPal, banking apps
- Separate bank account: Not legally required but makes tracking business finances much easier
- Monthly updates: Spend an hour each month updating records rather than a frantic weekend in January
Many creative freelancers use a simple spreadsheet, though cloud accounting software like Xero, FreeAgent, or QuickBooks can automate much of this tracking.
Allowable expenses for creative freelancers
Claiming all legitimate expenses dramatically reduces your tax bill by lowering your taxable profits. You can deduct any expense that is wholly and exclusively for your creative side hustle.
What’s allowed?
This can include equipment such as cameras, lenses, laptops, musical instruments and other tools used in the creative process.
Claim home office costs (£6 per week for 25-50 hours of home working), or calculate the actual proportion of your rent, mortgage interest, utilities, and internet that relates to business use.
Keep mileage records if you drive (45p per mile for the first 10,000 business miles). However, your regular commute to a permanent workplace doesn’t count.
You can also claim marketing and promotional expenses, such as website hosting, social media advertising, professional development such as courses and industry memberships. Include materials and supplies specific to your creative output and don’t forget insurance, legal and accounting fees.
For a more comprehensive exploration of tax-deductible expenses for UK creative businesses, visit our detailed guide at greenandpeter.co.uk/business-expenses-uk-creative-businesses.
Will HMRC find out about my side hustle?
The short answer: yes, it’s increasingly likely they will.
HMRC now receives automatic reports from digital platforms about user earnings. If you exceed the reporting thresholds, HMRC receives your details. The first wave of this data, covering 2024, arrived at HMRC by 31 January 2025.
Beyond this, HMRC’s Connect system cross-references information from banks, credit reference agencies, online platforms, property records, and social media. If you’re posting about your freelance photography work on Instagram while declaring no self-employment income, you’re opening yourself up to HMRC questions.
Getting professional help with your creative side hustle tax
Green & Peter Accountants, based in Whetstone, North London, work with many photographers, actors, musicians, and other creative freelancers managing self-assessment for their second income. We provide straightforward, advice in plain English that ensures compliance while maximising your tax efficiency, leaving you free to focus on your creative work. Chat to us by calling 020 8446 8100 or complete our online form to book a short discovery meeting.
Frequently Asked Questions
What is the HMRC side hustle crackdown?
The HMRC side hustle tax crackdown is enhanced enforcement of existing tax rules through automatic platform reporting that began in January 2024, requiring sites like eBay, Etsy, and Airbnb to share user earnings when sellers exceed 30 transactions or earn approximately £1,700 annually. HMRC has invested £36.69 million in enforcement and sends ‘One to Many’ letters to suspected non-declarers, giving them 30 days to regularise their affairs.
Will HMRC find out about my side hustle?
Yes, HMRC is increasingly likely to discover undeclared side hustle income through automatic platform reporting and their Connect system, which cross-references data from banks, online platforms, and social media. The first platform reports covering 2024 were delivered to HMRC by 31 January 2025, giving tax authorities direct visibility into many side hustle activities.
Do I need to pay tax on my creative side hustle if I earn under £1,000?
No, if your total income from all side hustles combined is £1,000 or less in a tax year, the trading allowance means you don’t need to register for self-assessment or pay tax. However, this threshold applies across all your activities combined, so £600 from photography plus £500 from selling artwork totals £1,100, requiring registration.
How much tax will I pay on my second income from freelancing?
Tax depends on your total income from all sources, with side hustle profits added to employment income to determine your tax band—you’ll pay 20%, 40%, or 45% income tax plus Class 4 National Insurance at 6% on profits between £12,570 and £50,270, then 2% above. For example, someone earning £35,000 from employment plus £8,000 side hustle profit would pay approximately 20% income tax and 6% NI on that £8,000.
If I make a loss on my side hustle, can I offset it against my employment income?
Yes, if your side hustle expenses exceed your income creating a trading loss, you can offset this loss against your employment income in the same tax year, potentially reducing your overall tax bill. However, HMRC scrutinises loss-making businesses, especially in early years, to ensure they’re genuine commercial ventures rather than hobbies.
About the author
Green & Peter Accountants, based in Whetstone, North London, specialise in supporting creative businesses and professionals with their tax compliance and financial planning. With extensive experience working with actors, musicians, photographers, and other creative freelancers, the team provides straightforward, jargon-free advice to help you manage your side hustle tax obligations efficiently.
