MTD for Side Hustles: Does It Apply to You
Side hustles are increasingly common, but many people are unsure whether MTD applies to their extra income. The answer depends on how much you earn and what type of income it is.
The £1,000 Trading Allowance
If your side hustle earns less than £1,000 gross per year, you do not need to register as self-employed or worry about MTD. The trading allowance covers this automatically.
Above £1,000
If your side hustle income exceeds £1,000, you must register as self-employed and file Self Assessment. Whether MTD applies depends on the total:
- Over £50,000 gross (from April 2026): MTD is mandatory
- Over £30,000 gross (from April 2027): MTD is mandatory
- Under £30,000 gross: Not currently required, but voluntary sign-up is available
Remember, it is the gross figure — total income before expenses. And if you also have property income, add that to your self-employment income.
Most Side Hustles Are Below the Threshold
If your day job is PAYE and your side hustle brings in £10,000–£20,000, you are likely below the MTD threshold for now. You still need to do Self Assessment, but MTD quarterly reporting is not yet required.
However, the threshold is expected to keep dropping. Getting into good digital record-keeping habits now will serve you well when MTD eventually catches up.
Accounted works for side hustlers and full-time self-employed alike.
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Tax & Compliance Specialists
Our tax specialists have decades of combined experience in UK sole trader and small business taxation, MTD compliance, and HMRC submissions. All content is reviewed against current HMRC guidance before publication and updated quarterly to reflect legislative changes.
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