Side hustle alongside my full-time job — at what point do I need to register with HMRC?

Hi Luna, good that you are thinking about this early. The rules are straightforward once you know the £1,000 line.

The £1,000 trading allowance

HMRC gives everyone a £1,000-a-year trading allowance. If your gross freelance income (before expenses) in a tax year is £1,000 or less, you do not need to tell HMRC or register - the income is covered in full. You should still keep basic records (invoices, bank statements, a simple list of receipts). At around £800 so far this year, you are below the line for now.

When you do need to register

If your gross side income goes over £1,000 in a tax year, you must register for Self Assessment by 5 October following the end of that tax year. So for 2026/27 (6 April 2026 to 5 April 2027), the registration deadline is 5 October 2027, and the online tax return and any payment are due by 31 January 2028.

Once registered, you pay tax on the profit - gross income minus allowable expenses - or you can claim the £1,000 allowance instead of adding up expenses, whichever gives the lower taxable figure. You do not get to claim both. Your employment income stays taxed through PAYE; the side business goes on the same Self Assessment return, and your personal allowance and tax bands apply to your total income.

Losses

If the side business makes a genuine loss, you can generally set that loss against your other income of the same tax year - including your employment income - which can generate a tax repayment, or carry the loss forward against future profits of the same trade. There are conditions (the trade must be run on a commercial basis) and caps, so check the position before claiming.

One practical point: once you are in Self Assessment, HMRC may ask for payments on account toward the following year's bill, so the January bill does not surprise you. Also keep an eye on Making Tax Digital for Income Tax, which from April 2026 requires quarterly digital updates for self-employed people above the qualifying income threshold.