Tax Planning
How the New Threshold for Self Assessment Reporting Transforms Side Hustles
Thousands with side incomes – online sales, dog-walking, etc. – may no longer need to file Self Assessment if their trading, property, and other income stays below new £3,000 thresholds.
By NomadicTax Research Team • 5-8 min read • November 23, 2025
## Overview of the upcoming change
The UK government is aligning the reporting thresholds for *trading*, *property*, and *‘other taxable’* income at **£3,000 gross each**. If your income from any of these sources is **under** that threshold, you won’t need to submit a full Self Assessment tax return just for them, provided you meet no other return requirements. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-spring-2025-simplification-administration-and-reform/tax-update-spring-2025-simplification-administration-and-reform-summary?utm_source=openai))
The change is expected to affect **around 300,000 taxpayers**, many with side hustles – those earning small sums from renting out a room, selling crafts online, pet care, or ride-sharing. The threshold shift frees them from filing Self Assessment returns **solely** for those small income streams. ([gov.uk](https://www.gov.uk/government/news/boost-for-side-hustlers-as-300000-people-to-be-taken-out-of-tax-returns-government-announces?utm_source=openai))
## What does “other taxable income” include?
- Any taxable income not from employed earnings, pension or benefits—for example:
- Income from online marketplaces, sales, hobbies turned into small business activity;
- Renting out a spare room or property;
- Occasional payments (e.g. tutoring, gig economy) that don’t amount to self-employment in the traditional sense.
- Every stream must be considered separately – the threshold applies per category. ([gov.uk](https://www.gov.uk/government/publications/summary-of-tax-update-spring-2025-simplification-administration-and-reform/tax-update-spring-2025-simplification-administration-and-reform-summary?utm_source=openai))
## New digital reporting option
If you’re under the threshold, you won’t have to file Self Assessment just for those incomes, but you **can** use a **new simple digital reporting service** to report them. This helps keep tax affairs transparent without all the burden of full self assessment. ([gov.uk](https://www.gov.uk/government/news/boost-for-side-hustlers-as-300000-people-to-be-taken-out-of-tax-returns-government-announces?utm_source=openai))
## Example scenarios
- **Case A**: Mia sells handmade jewellery online, earning **£2,500/year**; she also sometimes rents out a spare room earning **£1,500**. Under the old system, each might force her to file. Under the new rules, neither category crosses £3,000, so no Self Assessment return *just for those incomes* is needed.
- **Case B**: John rents a flat (property income £4,000) and has a small photography side business (£2,000). Since the property income exceeds £3,000, he still must report that category via Self Assessment.
## Implications for self-employed individuals and casual earners
**Positive changes**
- Less administrative hassle for people with modest side incomes.
- Potential savings on accounting/software costs if filing becomes unnecessary.
- Fewer penalties associated with missed returns for small incomes, assuming threshold remains respected.
**Areas to watch out for**
- Don’t ignore other requirements (like National Insurance, benefits, or when other income sources push you into returns).
- If you still expect Self Assessment (due to other incomes, share dividends, etc.), you’ll still need to file even if you’re under the threshold in trading, property, or other taxable incomes.
## Action steps
- Review all income sources for 2024-25 to see if any category exceeds £3,000.
- If all categories are under the threshold and you currently file Self Assessment *only* for them, you may no longer need to. But confirm this via HMRC tools or advice.
- Keep good records anyway—even for income under threshold—so you can respond if HMRC requests details.
- Explore the new digital reporting service so you can use it voluntarily for transparency and simplicity.
**Takeaway:** If your side hustle or casual income is modest, you’re likely to benefit significantly from the new £3,000 thresholds. It’s not about “tax-free” entirely, but about greatly reduced compliance burden.