A side gig is a job that you do alongside your normal employment. Whether it’s to earn extra money or pursue a passion, they are becoming increasingly popular with workers in the UK.For example, you might work as a bus driver Monday to Friday for your main form of employment, but every Saturday evening you make extra money from your ‘side gig’ as a musician in your local pub.
What are the tax implications for a side gig?
Side gigs and other forms of freelancing are becoming very popular with workers in the UK. They’re a great way to make additional income outside of their main job. Not only that, they’re ideal for someone to pursue their passion, whilst still earning a solid income to support themselves. However, what many people don’t realise is that there are tax implications.
Income earned from a side gig is untaxed, unlike the money you receive from PAYE employment. In a full-time job, Income Tax and National Insurance is already deducted before you receive your wage. Whereas with side gigs and freelancing, you’re solely responsible for paying tax on any earnings you make.
Do I need to tell HMRC about my side gig?
Everyone has an £1,000 tax allowance of additional income outside their regular work. If you earn anything over that from your side gig in the tax year (6th April – 5th April), then you’ll need to inform HMRC and submit a Self Assessment tax return. Failing to do so will result in hefty fines and interest on late payments.
The amount of tax and NI contributions you’ll pay depends on how much you earn with your side gig, and how much you earn in your full-time job. You might find that your side gig pushes your overall earnings into a higher tax rate band, meaning that you’ll pay more tax on those earnings.
Work out the amount of tax you’ll pay with our Employed and self-employed tax calculator
Unsure how much tax you’ll owe because of your side gig?
You can quickly calculate how much Income Tax and National Insurance you’ll owe on your earnings using our tax calculator!
