This one is for the people who’ve had a nagging worry for a little while now.
Maybe your side hustle earned more than you expected. Maybe you weren’t sure whether you needed to declare it, so you did nothing. Maybe life got busy and the January deadline slipped past.
You’re not alone. HMRC itself has reported that millions of people each year miss key Self Assessment deadlines or fail to register when they should. The important thing is knowing what the consequences are and what to do about it.
What are the penalties?
If you’re required to register for Self Assessment and don’t, you could receive a ‘failure to notify’ penalty. This is based on the amount of tax still unpaid. (HMRC — Self Assessment tax returns — penalties)
If you register but file your return late, the penalties build in stages:
- An immediate £100 fixed penalty for missing the deadline
- After 3 months, additional daily penalties of £10 per day, up to a maximum of £900
- After 6 months, a further penalty of 5% of the tax due, or £300 — whichever is greater
- After 12 months, a further 5% or £300 charge, with the potential for higher penalties in serious cases
(HMRC — Self Assessment tax returns — penalties)
Interest is also charged on any tax owed from the date it was due.
Does HMRC know about your income?
Since January 2024, online platforms are required to report seller income to HMRC. So if you’ve been earning through platforms like Etsy, Vinted, or similar, HMRC may already have a record of that activity. (HMRC — Selling online and paying taxes information sheet)
What should you do if you’ve missed something?
The right thing to do is come forward. HMRC’s general approach is that people who come forward voluntarily are treated more favourably than those whose undeclared income is discovered through an investigation.
The first step is registering for Self Assessment if you haven’t already done so. (HMRC — Check how to register for Self Assessment)
The key deadlines to know: you must register by 5 October following the end of the tax year in which you had income to declare. The tax year runs from 6 April to 5 April. (HMRC — Check how to register for Self Assessment)
A final thought
Tax rules can feel confusing, and it’s genuinely easy to miss a step — especially if you’re new to self-employment and juggling everything else that comes with it. The penalties exist to encourage compliance, not to punish honest confusion. Getting things straight as soon as you can is always the better path.
If you’re unsure whether you have anything to declare, use HMRC’s free online tool before doing anything else.
Use our free UK side hustle tax calculator to find out exactly what you owe — so you know the full picture before you contact HMRC.