Whether you’re freelancing on weekends, selling crafts on Etsy, or tutoring after hours, you may be wondering: do I really need to register as self-employed for this extra income? The answer depends on how much you’re making and how your work is structured. In this article, we’ll break down the official rules from HMRC, common scenarios, and the risks of skipping registration.
What Counts as Self-Employment?
You’re generally considered self-employed by HMRC if you run your own business and aren’t paid through PAYE. Key indicators include:
- You set your own hours and prices
- You invoice customers directly
- You take on financial risk and responsibility
- You use your own equipment or tools
- You can hire others to help
This applies whether your business is full-time or something you do on the side of your 9–5 job.
The £1,000 Trading Allowance
The most important number is £1,000. If you earn less than £1,000 in a tax year from self-employment, you don’t have to register — this is known as the trading allowance.
But if your total self-employed income exceeds £1,000 (before expenses), then yes, you must register as self-employed with HMRC. It doesn’t matter if it’s profit or just turnover.
Example: You have a full-time job and make £1,200 in a year selling digital prints online. Even if this isn’t your main income, you still have to register with HMRC.
Side Income That Triggers Registration
Common types of side hustle income that may require registration:
- Freelance services (design, writing, photography, tutoring, etc.)
- Selling on Etsy, eBay, Vinted or Depop
- Consulting or coaching
- Renting out equipment or tools
- Delivering food or parcels
- Making and selling digital products or courses
If the income from any of these exceeds £1,000 in a tax year, you’re legally required to register as a sole trader.
What If I Also Have a Full-Time Job?
This is a common misconception: that being employed full-time means you’re exempt from registering. That’s not true.
Even if your primary income comes through PAYE, any extra income from self-employment must be reported to HMRC once it crosses the trading allowance. You will still file a Self Assessment tax return for your side income, even though your employer handles your PAYE taxes.
Exceptions: When You Might Not Need to Register
- Your side income stays under £1,000 gross per year
- You’re selling your own personal used items occasionally (not running a business)
- You receive rental income under the Rent-a-Room Schemethreshold (£7,500/year)
- You’re paid via PAYE for all your income (e.g., a second part-time job)
Still unsure? The safest option is to register as self employed — it’s free, simple, and helps you stay compliant.
When Do I Have to Register?
If your side income is above £1,000 in a given tax year (6 April to 5 April), you must register by 5 October following the end of that tax year.
For example, if you earned £1,500 from side gigs between April 2024 and April 2025, you must register by 5 October 2025.
What Happens If I Don’t Register?
- Initial late registration fine: £100
- Additional penalties if the tax return is also late
- Interest on unpaid tax
- Potential 100% fine on undeclared tax for deliberate concealment
HMRC has the right to investigate bank accounts and online platforms like PayPal, Etsy, and eBay, so unreported side income can easily trigger an inquiry.
How to Register as Self-Employed
If you meet the threshold, registering takes about 10–15 minutes:
- Go to UKand search for “register for Self Assessment”
- Create a Government Gateway account
- Get your UTR (Unique Taxpayer Reference) by post
- Activate your online account
For a full walkthrough, check out ANNA’s guide on registering as self employed.
FAQsDo I need to register even if I made only £1,050?
Yes. HMRC’s threshold is £1,000, so any income above that means you must register.
What if I had high expenses and didn’t make a profit?
You still need to register if your gross income (before expenses) exceeds £1,000.
What if my side income was a one-off?
If it exceeds £1,000 and meets HMRC’s self-employment tests, you still may need to register—even for one project.
I already pay tax through PAYE—do I still file a tax return?
Yes, but only for the self-employed portion of your income. Your PAYE taxes remain unchanged.
Can I backdate registration if I forgot?
You can, but it may result in penalties. It’s best to act quickly and contact HMRC if you realise you missed a deadline.
Final Thoughts
Having a side hustle is a great way to boost your income—but it also comes with responsibilities. If your self-employed income crosses the £1,000 threshold, even alongside a full-time job, you need to register as self employed and file a tax return. It’s straightforward, and staying compliant helps you avoid penalties and build a legitimate income stream.
