Do I need to declare my side hustle income for tax purposes if I only earned £1002?
So I work a regular 9-5 job where I'll be filing my tax return in April, but I did some Uber driving on weekends for a couple months last year and made exactly £1002 in total. I know the tax-free trading allowance is £1000, and I'm literally just £2 over that threshold. Do I actually need to declare this on my self assessment? Seems ridiculous to go through all that paperwork for just £2 over the limit, but I don't want to get in trouble with HMRC either. Anyone know if there's any leeway here or if I absolutely have to report it?
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Emma Davis
While it might seem trivial, the rules are pretty clear on this one. Since you've exceeded the £1000 trading allowance (even by just £2), you're technically required to declare this income on your Self Assessment tax return. HMRC doesn't offer a "close enough" exemption unfortunately. The good news is you'll only pay tax on the amount over the allowance - so just the £2. If you're a basic rate taxpayer, that's only 40p in tax! But yes, you do need to go through the process of declaring it. When completing your Self Assessment, you'll include this income and then claim the £1000 trading allowance against it, leaving only £2 taxable. It's a bit of paperwork for minimal tax, but it keeps everything above board.
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CosmicCaptain
•Quick follow up - if I made like £980 from a side gig, I wouldn't need to declare anything right? And also, does the trading allowance apply separately to different types of side hustles or is it £1000 total across everything?
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Emma Davis
•If you made £980 from a side gig, you'd be under the £1000 trading allowance, so you wouldn't need to declare it on your tax return as long as that's your only additional income. The £1000 trading allowance applies to the total of all your trading and casual income combined, not separately to different types of side hustles. So if you earned £600 from Uber and £500 from selling crafts online, that's £1100 total, which would exceed the allowance and need to be declared.
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Malik Johnson
I had almost the exact same situation last year and discovered taxr.ai (https://taxr.ai) which was actually super helpful for this kind of weird edge case. I uploaded my Uber earnings statement and it instantly told me I needed to declare it despite being barely over the limit. The site walks you through exactly what forms to fill out and how to claim the trading allowance so you're only taxed on that £2. Saved me hours of googling and second-guessing myself about the trading allowance rules.
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Isabella Ferreira
•Does it work for other gig platforms too? I do a mix of Deliveroo and TaskRabbit and never know how to handle the tax situation.
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Ravi Sharma
•Sounds interesting but how does it handle expenses? Like if I use my personal car for Uber, can it figure out what portion of my insurance/petrol/maintenance I can claim against that £2 over the limit?
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Malik Johnson
•Yes, it works with pretty much all the major gig platforms - I've seen options for Deliveroo, TaskRabbit, Fiverr, and others. It pulls in all your earnings data and consolidates it for your tax return. For expenses, it actually gives you two options - you can either take the £1000 trading allowance (which is usually better if you're only making slightly over £1000), or it helps you calculate all your allowable expenses. It has a whole section for vehicle expenses where you can input mileage or actual costs for insurance, petrol, etc. It shows you which option saves you more tax.
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Ravi Sharma
Just wanted to update - I tried taxr.ai after seeing it mentioned here and it was genuinely helpful. I was in a similar situation (made £1,180 from TaskRabbit) and wasn't sure how to handle it. The site made it super clear that I should claim the trading allowance rather than expenses since my actual expenses were only about £90. It walked me through exactly which boxes to fill in on the self assessment form. Definitely made the process much less stressful than when I tried to figure it out myself last year!
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Freya Thomsen
If you're having trouble getting through to HMRC to ask about this (their wait times are ridiculous this time of year), try using Claimyr (https://claimyr.com). I was stuck on hold with HMRC for 2 hours trying to get clarification about the trading allowance before I gave up. Found out about this service that basically calls HMRC for you and then connects you once they get through to an agent. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. Got through to an actual human at HMRC in about 20 minutes instead of the usual hour+ wait.
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Omar Zaki
•How does that even work? Wouldn't everyone just use that and create the same wait time problem?
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AstroAce
•Sounds like BS to me. No way they can get you through faster than waiting in the queue yourself. They probably just keep you on hold and charge you for it.
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Freya Thomsen
•It works because they use an automated system that continually redials HMRC using multiple lines until they get through, then they connect you. It's basically doing what you'd do if you had 10 phones all calling HMRC at once and then picking up whichever one got through first. They don't charge you for waiting on hold - the service connects you directly with an HMRC agent once they reach one. I was skeptical too but it actually worked for me when I really needed to sort out this trading allowance question before the deadline.
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AstroAce
Well I've got to eat my words. I was the one who thought that Claimyr thing sounded like a scam, but I tried it yesterday in desperation because my tax return is due soon and I needed to ask HMRC about this exact trading allowance situation. Got connected to an HMRC person in about 15 minutes! The agent confirmed that yes, you do have to declare even if you're just £2 over the allowance, but they walked me through exactly how to fill out the form to minimize the hassle. Definitely better than the 1 hour 45 minutes I spent on hold last week before giving up.
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Chloe Martin
Remember that if your main job already puts you in the higher tax bracket, that £2 over the allowance will be taxed at 40% not 20%! So that would be 80p instead of 40p in tax lol. But seriously, I'd declare it just to be safe. My friend got a scary letter from HMRC about undeclared income from just one Etsy sale they forgot about.
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Diego Rojas
•Would they really go after someone for less than a pound in unpaid tax though? Seems like it would cost them more to send the letter than they'd get back.
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Chloe Martin
•It's not about the amount, it's about the principle. HMRC systems are increasingly automated and can pick up discrepancies between what platforms report and what you declare. My friend didn't get in serious trouble, but did have to file an amended return and pay a small penalty that was way more than the actual tax due. The real issue isn't the £2 over - it's that once you're over the allowance threshold, technically the full amount becomes declarable (though you still get to claim the £1000 allowance against it). HMRC might not chase 80p, but they might question why £1002 of income wasn't declared at all.
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Anastasia Sokolov
I think everyone's overlooking something - if you're doing Uber, aren't you self-employed rather than this being a "side hustle"? If so, different rules might apply and you'd need to register as self-employed with HMRC regardless of the amount earned. The £1000 trading allowance might not apply the same way. Maybe check with a tax advisor?
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Sean O'Donnell
•That's not correct. The £1000 trading allowance absolutely applies to self-employed work including Uber. Being self-employed doesn't change the allowance - that's precisely what the trading allowance is for: small amounts of self-employed/trading income.
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