What the Latest HMRC “Side-Hustle” Tax Rules Mean for UK Creatives

Introduction

If you’re a self-employed creative based in London and the South East, whether an artist, musician, actor, filmmaker or part of a production crew, you may think you can overlook some of the tax talk because your income feels “irregular”. But when it comes to accounting for creatives, recent changes by HM Revenue and Customs (HMRC) around so-called side-hustles are worth paying attention to. In this blog we’ll unpack exactly what’s changed, how it could affect your creative income streams and why a specialist accountant like Creative and Numbers is well placed to help you navigate it.

1. What’s changed: Reporting thresholds and side-hustle income

Here’s the key update: currently, if you earn more than £1,000 in a tax year from what HMRC calls “trading income” outside your main employment, you must report it, typically by registering for Self Assessment. HMRC has announced a plan to raise the threshold so that up to £3,000 might be the new level at which you’ll need to submit a full tax return, though the tax-free trading allowance remains at £1,000.For creatives, this means you might soon have a little more breathing room. But you’ll still owe tax on earnings above £1,000, and the new rule doesn’t mean zero reporting or “free money”.

At Creative and Numbers, we keep track of these changes so you don’t have to, and we make sure they’re applied properly to creative income.

2. Why this matters particularly for creatives

Your work often involves multiple income streams: commissions, royalties, performance fees, licensing, production day rates. That means what counts as “side-hustle” income for someone else might be part of your main earnings for you.

· You could easily hit the £1,000 threshold without realising (for example, a short film job or a one-off exhibition sale).

· If you’re already self-employed, you’ll need to ensure every source of income is captured in your bookkeeping and tax return.

· In the creative world, expenses are just as varied: equipment hire, travel to shoots, rehearsal space, and sometimes royalty receipts. A generalist accountant may overlook these nuances, whereas an accountant specialising in accounting for creatives will understand them from day one.

3. Steps you should take now to stay ahead

Here are actions tailored for creatives in United Kingdom: A. Register with HMRC if you haven’t. If you’re earning self-employed income (even one-off) you may need to register for Self Assessment. B. Track every income stream. Make sure you log all payments: gigs, royalties, commissions, production days. C. Log your expenses. You’ll want to claim allowable expenses (equipment, studio hire, travel) to reduce your taxable profit. A specialist like Creative and Numbers can advise which are legitimate for your work. D. Review your tax year numbers regularly. Don’t wait until January to find you’ve exceeded thresholds or missed something. Talk to an accountant who knows creative industries. Because your accounting for creatives needs differ from, say, a shop-owner or plumber.

4. What the tax-breakdown looks like for creatives

Here’s a rough view of how tax works for those with additional income:

· The personal allowance (income you can earn tax-free) for 2025/26 is £12,570 (for England and Wales).

· If your extra income (after expenses) pushes your total income beyond the basic rate band (currently £50,270), you could be taxed at higher rates (40% or more) on the excess.

· For any income above the £1,000 trading allowance, you must report it, even if you don’t reach the higher threshold yet.

In short: just because it’s your “creative side project” doesn’t mean HMRC treats it differently. That’s why specialist accounting for creatives matters, someone who understands your rhythms and revenue types.

5. Common pitfalls for creatives and how to avoid them

Here are issues we regularly see at Creative and Numbers when working with London and South East creatives:

· Mixing personal and business income or expenses. Don’t use the same bank account for everything.

· Forgetting to include small income streams, for example, a one-off licence, an appearance fee, or the sale of prints.

· Claiming expenses that aren’t wholly and exclusively for the business, which could trigger HMRC queries.

· Delaying bookkeeping until year-end, leading to a rush and potentially missed deductions.

By engaging an accountant who specialises in accounting for creatives, you’ll get tailored advice (for instance, making sure equipment hire before a project starts is claimable) and avoid these missteps.

6. How Creative and Numbers supports you

At Creative and Numbers, we frame everything around your creative life, not forcing you into standard accounting shapes. Here’s what we bring:

· Bookkeeping tailored to creative income streams (events, royalties, film production days)

· Tax return preparation for self-employed creatives, understanding HMRC’s side-hustle rules

· Advice on how to document and claim allowable expenses properly

· Regular check-ups and catch-ups so you’re never surprised by tax time

If you’re based in London and the South East and working in the arts, media or production, we speak your language, both metaphorically and financially.

Summary

Getting your head around HMRC’s side-hustle tax rules might feel like a chore, but if you’re a creative professional, it’s simply part of making sure your financial base is solid so you can do your best work. Good accounting for creatives means you capture all your income, make full use of allowable expenses, and stay on the right side of HMRC. With the right support, you’ll spend less time worrying about tax and more time on your craft.

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Ready to hand off the numbers so you can focus on your creativity? Reach out to Creative and Numbers and let us take care of your bookkeeping, tax filings and tailored accounting for creatives, while you get back to creating. Book a free 30-minute consultation with Creative & Numbers today.