How to start a side hustle and boost your income

Side hustles are businesses or freelance work that people do to make extra money in the UK economy.  

The rise of digital platforms like Deliveroo, Uber, Amazon, eBay and Etsy have led to an increasing number of people running side projects alongside a full-time job, while recent economic conditions and the cost-of-living crisis have also provoked people to look for ways to top up their wages.

According to Simply Business, 35% of Brits now run a side hustle, while a study by GoDaddy found that the average side hustler makes £18,200 in revenue a year.

What is a side hustle? 

A side hustle is an income generating activity pursued alongside a full-time job. Unlike a traditional part-time role working for an employer, you have complete freedom over the hours you work and how you do it.  

Side hustles are often related to a person’s passions, skills or interests and can be the first step towards turning a hobby into a full-time business.  

Identifying the right side hustle for you

When choosing what side hustle to start, think which of your skills or interests could be turned into an income generating activity.

As you already have a full time job, you need to make sure you have enough time to run your side hustle. You don’t want to spend so much time on your side job that you burn out, but you do need to be able to dedicate enough time so that it generates the income you want.  

You should write a business plan and carry out some market research, even if you're not a full-time business owner. This will help you determine if there's a market for your idea. 

Popular side hustles in the UK 

Here are some popular UK side hustle ideas: 

Blogging and freelance writing 

Types of blogging include sharing your thoughts on a subject, providing educational content and reviewing products. You can make money from a blog by using affiliate marketing, generating sponsorship and offering advertising. 

As a freelance writer, you can earn payment by writing content for others.    

Online retail 

Selling products using online marketplaces is extremely popular. Ways to make money online include selling your old things or reselling items from others on eBay and Vinted. You can also make and sell your own products on websites such as Etsy and Amazon.  

Tutoring 

If you have knowledge or skills you can teach other people by starting a tutoring side hustle. This could be in-person lessons, using video conferencing services like Zoom and selling online courses on platforms such as Udemy, Thinkific and Teachable.  

Pet walking and sitting  

Many side hustlers walk pet dogs or care for animals over a longer period. Platforms to use include TrustHousesitters, Rover and Pawshake. 

Legal and financial considerations for side hustles 

There are various rules and regulations you need to be aware of when running a side hustle.  

Your employer may require you to ask their permission before earning additional income. There might also be a condition in your employment contract that states you can’t have a side project that competes with the company you work for.  

If you are seeking a profit from a side hustle, you might need to pay income tax and National Insurance. You will need to register as a sole trader and submit an annual self-assessment tax return. If you decide to set up a limited company, you have more responsibilities.   

Rules introduced on 1st January 2024 mean popular side hustle platforms like Amazon, Deliveroo, eBay and Airbnb must report information about certain users’ income to the Government as part of efforts by HM Revenue & Customs (HMRC) to ensure people are complying with tax regulations.  

Some business activities, such as selling alcohol, beauty services and working with food, require a licence. To determine if you need a licence, use the gov.uk website or speak to your local council.  

Financial management for side hustlers 

Although side hustles are set up to provide extra income on top of the wages for your job, you still need to budget and manage your finances.  

You should always try to keep your personal and side hustle finances separate. You can do this by opening a separate bank account. Benefits of doing this include being able to more accurately calculate the expenses you are entitled to claim to reduce your tax bill. 

Working out a budget for your side hustle is useful so you don’t have cash flow challenges. Consider all your expenses to avoid overspending. Costs to consider include the fees charged by popular online marketplaces like Amazon and eBay.  

To keep your side hustle on track, set financial objectives. 

Juggling your day job and a side hustle 

Running a side hustle alongside your day job will naturally increase your workload, but it’s important that you don’t overdo it and find a happy balance.  

You need to enjoy what you’re doing, so make sure you pick a side hustle that fits with your interests and passions.  

Plan out the hours that you intend to spend running your side hustle. Depending on the hours you work full-time, this could be before you go to work, in your lunch break, in the evenings, at weekends or a combination of some or all of them. Be careful to not let your side hustle activities interfere with your day job.   

Use a different email address for your side hustle to keep your tasks separate from your day job.  

Project management tools such as Asana, Trello and Monday.com are useful for creating to do lists so you stay focused.  

If you have a family member or friend willing to help, you could get them involved in your side hustle to share the workload.  

If you do feel too stressed, listen to your body and take a rest.  

Your side hustle making lots of sales could indicate it’s time to reduce the hours in your day job, or even quit completely and run it as a full-time business. Make sure you are completely ready for that though. 

Get help with starting your side hustle 

TaxAssist Accountants can help you with the right advice to support your business. We can help with taxes, accounting, bookkeeping, payroll, and connecting you with other providers we work with. 

Contact us to learn more about our services and to book a free initial meeting. 

Date published 24 Jan 2024 | Last updated 20 Mar 2024

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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