HMRC has announced a seemingly welcome change for small earners and side hustlers: 

💥 From the 2024/25 tax year onwards, you will not be required to report self-employment or property income below £3,000. 

At first glance, this feels like a win—less admin, fewer tax returns, more freedom. But as accountants who’ve seen how these rules play out in real life, we’re a little more… cautious. 

Because, as always with tax, the devil is in the detail. 

🔍 What’s Actually Changing? 

Currently, if you earn less than £1,000 in trading or property income, you don’t need to report it to HMRC. 

From the 2024/25 tax year, this threshold increases to £3,000. That means:
✅ If your total gross self-employment or property income is £3,000 or less, you won’t need to register for Self Assessment or submit a tax return (unless required for other reasons). 

Sounds like good news, right? 

⚠️ Why We Think This Isn’t as Helpful as It Sounds 

Here’s where the nuance comes in. 

Many people with side hustles under £3,000 also have a full-time PAYE job, and their small business isn’t yet profitable. In the current system, they would still register for Self Assessment and potentially use their trading losses to offset against their employment income. 

But under the new £3,000 reporting exemption:
🚫 You don’t file a return
🚫 You can’t claim losses
🚫 You miss out on potential tax relief 

Even under the trading allowance (which remains at £1,000), you can’t use it to create or increase a loss—it’s either: 

• a flat £1,000 deduction from gross income, or 

• actual allowable expenses (if you’re filing a return) 

So, for someone running a genuine business, who has setup costs, equipment purchases, software subscriptions, or marketing spend, filing a tax return could be more beneficial, even if under the threshold. 

Our concern? This change encourages convenience over optimisation—and HMRC knows it. 

💬 What This Means for Small Business Owners & Side Hustlers 

If you’re making less than £3,000 per year, it’s easy to think “why bother” with accounting and tax. 

But here’s what you might miss: 

• The opportunity to track your losses properly 

• Understanding if your business could become viable long-term 

• Early advice on when to register for tax and VAT 

• Knowing when side income tips into something HMRC expects to see declared 

And if your business grows? You’re suddenly going from zero oversight to full compliance, which often leads to missed claims, panic filings, or worse—penalties. 

✅ Our Advice 

If you earn under £3,000 and have minimal costs, this change may work in your favour. 

But if you: 

• Have business expenses that exceed £1,000 

• Want to track early-stage trading losses 

• Plan to scale your side business 

• Want clarity on when to register for Self Assessment or VAT 

…then it’s still worth speaking to an accountant, even if you’re not required to file yet. 

💼 Get Clear, Honest Advice from an Accountant Who Gets It 

At Adaptive Accountancy, we help small business owners, freelancers, and side hustlers understand what tax rules really mean—not just on paper, but in real life. 

We’ll help you: 

• Know when you should register 

• Track income and expenses properly 

• Avoid costly surprises as your income grows 

• Understand if you’re missing out on valuable reliefs or claims 

📩 If you’re unsure whether this change helps or hinders your tax position, get in touch for a quick, honest chat. 

Because good advice early on is always cheaper than fixing mistakes later.