Many of us have taken up a side hustle to earn extra cash—selling handmade items, freelancing, or doing deliveries. But it’s important to understand that even this additional income may be subject to tax.

The UK government is introducing Making Tax Digital (MTD) for Income Tax and Self Assessment (ITSA) to modernise the tax system. Starting from April 2026, sole traders, the self employed and landlords earning over £50,000 will need to keep digital tax records and submit updates every three months instead of annually.

In the UK, you must register for VAT if your taxable turnover exceeds £90,000 over a 12-month period or if you expect to exceed that amount in the next 30 days.

The UK is ending the special tax regime for Furnished Holiday Lettings (FHL) from April 2025.