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Original poster

Why does my side hustle tax bill seem so high?

105 replies

labtest57 · 10/04/2026 11:21

Hi
I am looking for some advice please. I work full time and pay paye tax on that job, but have been making extra doing surveys as a side hustle and this tax year have earned just over £2000. Today I attempted to fill in a sole trader tax return and the final calculation said I owed just over £800. By my calculations, with one thousand tax free and 20% tax on the rest, I should only owe £200. I have contacted HMRC and am passed from pillar to post and still none the wiser. I had to give all full time job info but surely that ia irrelevant anyway.

OP posts:
begonefoulclutter · 10/04/2026 20:27

Silvers11 · 10/04/2026 12:20

@labtest57 This ^^

If it's surveys, you are not 'trading' and not running any kind of business. You are not a sole trader. You should be completing a self assessment return and putting the detail of the income under 'other income' You WILL pay tax on the whole £2000 - so around £400. If you had Gross income from the surveys of less than £1000 (i.e. before you take expenses off) you don't need to tell them - but if you have more, then you need to tell them the full amount. It will all be taxed at the rate you are on for your main job ( unless it takes you over to the next tax band)

Edited
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'Sole trader' is simply an accounting term for someone who is self-employed. Which the OP is.

Onmytod24 · 10/04/2026 21:12

CitizenZ · 10/04/2026 15:18

Don't advise people unless you know what you are talking about. You can't claim petrol or travel expenses for taking online surveys in your own home. You have to actually be doing the travel for your 'side hustle' in order to claim the expenses for them. Anyway, she's already mentioned she's used the Trading Allowance, you can't claim that AND other expenses, it's one or the other.

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Do you honestly believe that everyone commenting on this column knows what they’re talking about and are you giving them all the same response?

Q2C4 · 10/04/2026 21:15

BangFlash · 10/04/2026 11:38

'Sole trader' suggests you are filling in a company return to me.

You are an individual needing to pay income tax self assessment to declare additional income.

This is not correct. A sole trader is an unincorporated business, the profits of which will be liable for income tax.

mynumber · 10/04/2026 21:17

begonefoulclutter · 10/04/2026 20:05

I wouldn't advise using anything other than the official HMRC website.

You will always have to use the official HMRC website/app and their calculations - no way around that!
My advice to ask ChatGPT/Gemini questions is to help OP with her understanding of what is happening before she pays someone! It’s a great free tool to try to see if it can help. (Obviously it doesn't alway get everything right but it’s not filling in the form for you and it will help with the understanding).

Cocabuta · 10/04/2026 22:28

labtest57 · 10/04/2026 14:14

I think i will have to

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Think this is the best course of action. I believe there’s been a lot of inaccurate advice given here. Since I’m no expert myself I don’t want to add to that, so would just advise you to seek an accountant like tax scouts which is affordable. Good luck!

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