Lots of side-businesses grow out of hobbies and extracurricular interests, as business owners decide to earn a little extra from what they enjoy. The good news is that

HMRC allow you to earn up to £1,000 (gross, before expenses) through small hobby-based income, tax free.

There is even a property income allowance of £1,000 for people renting out rooms or homes.

Sole trader accountancy services from £24.50 per month

Earning over the hobby-business tax free allowance

If you do earn more than the £1,000 allowance, you'll be expected to register for Self Assessment and start paying tax on your profits. It's vital to record all of your transactions so that you know how much you're earning. Having decent bookkeeping records also makes declaring your income and tax much simpler!

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