To resent paying so much tax on side hustle earnings?

That's incredible, well done you.

Can you explain a bit more how you cover everything privately?

How do private emergency services work, is that a subscription service that sends private fire/police/ambulance services etc if you need them?

How do you get around if you don't use the road networks?

Do you subscribe to a private rubbish collection service?

Please do tell us more about how you manage to live without taking anything from the state.

Deduct any expenses and pay yourself an annual dividend (that attracts a lower rate of tax).

Don’t set up a limited company as suggested above

Yes the dividend tax rate is lower than income tax but the company has to pay corporation tax too

Aren’t you lucky that you can contribute so much to society, why not be proud?

Correct it is income, exactly the same as if you earns more in your main job

So yes you are wrong to resent it

It’s one or the other. So unless your expenses are more than £1k you are better off using the allowance.

Assuming you are fully into the higher rate band then yes if you did take off expenses then the full £1,850 would be taxed at 40%. Or if you used the allowance then £1,000 would be taxed at 40%.

Are you paying into a pension? Making gift aid payments? these both extend your basic rate band so you pay more tax at 20% rather than 40%.

Deoending on how much you expect this side hustle to take off the only real planning you can do is setting up a company. You’d then only pay corporation tax at 19% and then pay yourself dividends which are taxed at a lower rate than employment/self employment income.

i really sympathise OP. We’re actually selling our rental properties for essentially the same reason. It’s just not worth the risk once you pay 40% tax.

Where did this ridiculous name 'side hustle' come from? - another 'americanism' I assume

It is either a hobby which earns minimal income or an income stream (self-employed).
You are not an 'entrepreneur'
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Of course you have to pay more tax on it if you are lucky enough to be a higher rate tax-payer!

What's wrong with doing that?

People have had to work multiple jobs for generations before the benefits system became so broken and profligate that working minimal hours in order to claim optimum overly generous benefits became a lifestyle choice for many people.

Just be glad you're not in the highest tax bracket then.

Also, is worth considering that the government is only generating 8% off the revenue collected by income tax from people in the standard and 40%. The rest comes from those in the 45% bracket, and even then from the ones earning considerably over £250k. It boggles my mind to think that 1% of earners in this country contribute 92% of the revenue generated in income tax. (Source ONS).

If you are serious about your second income stream, get an accountant. A decent one will save you more than they cost.

You can of course feel how you feel but its pretty ridiculous to resent paying tax just because its a side hustle when its still work and extra income. At least you're getting the 1k before tax whereas I'm self employed and as my side hustle is another string of self employment I pay tax on all profit regardless of any 1k cap. Same as on mat leave, I read that if you're employed you can so some self employment on the side but as I am self employed, I couldn't do anything beyond standard KIT days without it being seen as a return to work. Why shouldn't you pay tax on all that you earn whatever the source once you're over the threshold?

Tories have kept tax thresholds stagnant for a long time, which needs attention.

this gets overlooked

What’s the side hustle? I know lots of people who do ebay/boot sales/diy/beauty treatments on the side & don’t declare it.

It clearly isn't 'pointless' because even without doing what other people do and offsetting expenses you keep 60% of monies for something you claim you do for fun.

Stop doing your side hustle, or commit tax fraud, or pay your tax bill - you have the same choices as everyone else in a civilised country.

Tories have kept tax thresholds stagnant for a long time, which needs attention. But you're being silly to think a second job shouldn't be taxed.

I’m a net contributor, have been for years.When I look at the enormous sums of tax I pay I do sometimes feel a bit pissed off. But, that’s just life in the UK. If you earn it and however you earn it, you’ve got to pay tax on it.

I get annoyed tax is disproportionate eg PAYE vs dividends/CG etc

You feel that you should be rewarded for earning more money? Because you've "taken initiative?!" OP, you're not a child warning oennies for chores you're an adult earning money for your time.
If you can make money from something you consider fun and a hobby, you should count yourself extremely lucky.

Don't forget you only pay tax on the profit, so set up proper accounting, keep receipts for anything you need to buy for this business. You will also have to pay NI as well as income tax.

Everyone talks about the tax rate - but nobody ever mentions national insurance. Which goes down from 12% to 2%.

So the difference is less than people think - standard rate tax payers pay 32% on a lot of their earnings (the thresholds for tax and ni are different, but broadly similar-ish), higher rate 42%.

The difference is 10% of earnings, not 20%.

I’m a net contributor, have been for years. When I look at the enormous sums of tax I pay I do sometimes feel a bit pissed off. But, that’s just life in the UK. If you earn it and however you earn it, you’ve got to pay tax on it.

But you want to make money from it, hence the tax. You wouldn't have to pay out for doing your hobby.

Your initiative is rewarded by being able to take advantage of different tax rates for employment versus self-employment.

And you're still making money - you've done your hobby and made money.

I get it OP.

The £50k higher rate doesn't feel as generous as in did in 2019 when it was introduced.

If you're needing to top up your income, then the tax can sting, as you're putting extra time into earning that money, and the tax immediately takes 40% . Feels like half.

I get it's frustrating.

The reward is the money you are making ffs!

I really wish people would stop encouraging matched betting on here.

We have a gambling epidemic in this country with people having gambling debts of millions of pounds in all.

Gambling is an addictive pastime, and the industry only encourages it.

It doesn’t matter whether it’s (allegedly) risk-free. It’s still gambling, and it still encourages people into an industry which encourages addiction.

Do you set heating costs for your office against side job or can you employ DH as something ?

Quite agree OP you get off your arse to improve yourself don’t rely on state for income and as a thank you they take 40% of it
more than happy to pay standard rate just seems unfair

An ISA wouldn’t help with the problem OP is complaining about. Nor would extra pension really since she talks about needing money for helping family/the cost of living crisis.