Thriving Under £3,000: How Side Hustlers & Self-Employed Benefit from New Filing Thresholds

What’s Changing

As part of the government’s Plan for Change, the Income Tax Self Assessment (ITSA) reporting threshold for trading, property, and "other taxable" income is being aligned to £3,000 gross each. If your income from any of those streams falls below £3,000, you may no longer be required to file a full Self Assessment tax return. (gov.uk)

Up to 300,000 taxpayers, many of them “side hustlers”—online sellers, gardeners, rideshare drivers—will benefit. Around 90,000 of them currently have little to no tax liability. (gov.uk)

Operational Implications

• Tax reporting: Even though the filing requirement may be removed, a new digital reporting option will be offered. You may still choose to stay in Self Assessment voluntarily. (gov.uk)

• Tax liability: This change doesn’t alter the tax rates or allowances. If taxable income exceeds the new thresholds—or if multiple streams push you above—it’s still necessary to report.

• Deadlines & software: If you're near or crossing the threshold, ensure record-keeping and filing systems are ready. Use software to track all income sources accurately.

Examples

1. Emma, a social media content creator, earns £2,500/year from sponsorships and merch. Under the new rules, she’ll no longer need a Self Assessment return for that income alone—and can use the simpler digital service instead.

2. Ben, who drives part-time and tutors online, earns £4,000 from tutoring, £2,500 from driving, and £500 from selling art. Since one stream (tutoring) exceeds £3,000, he still needs to file.

Best Practices Going Forward

• Consolidate incomes from different sources and check cumulative income against thresholds.
• Track your income year-round using tools or apps—don’t wait until deadline season.
• Use the digital reporting service when suitable and remain aware of upcoming dates.
• For those slightly under the limit, understand whether remaining in Self Assessment brings benefits (e.g., claiming expenses).

Strategy Tips

• Expense claims: If you have allowable expenses tied to your small income stream, being in Self Assessment may still make sense.
• Separating income types: Different streams (property, trading, investment) have different thresholds and rules.
• Record thresholds from Spring Budget and Autumn Budget: Changes may come incrementally—stay updated with draft legislation.

Overall, the new £3,000 gross threshold represents a relief from unnecessary reporting, especially for low-income self-employed individuals and side hustlers. It lowers administrative burdens while ensuring those with significant income and tax obligations continue to file properly. Preparation, good record-keeping, and awareness are key to making the most of this shift.