Got a side hustle? Your tax rules might be changing – here's what we know so far

According to the Government, around 300,000 people will no longer have to file a self-assessment tax return once the change comes into effect. However, it's not yet clear when this will happen – all we know is that it should be "within this parliament", which could be as late as 2029.

The change means you'll eventually be able to earn up to £3,000 without filing a tax return

This won't affect how much you can make before you start owing tax or how much tax you'll pay – it's only about how you declare your earnings to HM Revenue and Customs (HMRC).

Currently, you need to file a self-assessment tax return if you earn over £1,000 in total from any side hustles such as trading goods, dog walking or gardening on the side, driving a taxi, or creating online content.

But, in future, you'll be able to earn more before having to file a tax return. Here's how this will work:

• If you make £1,000 or less, you won't need to declare your income or pay tax on this. This is the case now, and it's not changing – see below for how the current rules work.
  
  Note: What counts is your total income before taking off any platform fees or other expenses – NOT what you end up with in your bank account. So double check, especially if you're close to the limit.

• If you make between £1,000 and £3,000, you WON'T need to file for self-assessment, but you'll still need to tell HMRC and pay tax. You'll be able to report your earnings and pay tax using a "new online service" – though it's not clear yet how this will work or when it'll be launched. We'll update our Do I pay tax on online earnings? guide when we know more.

• If you make more than £3,000, you'll need to file a self-assessment tax return. For help with this, see How to declare your additional earnings.

If you're renting out property, the new rules will apply in a similar way – meaning you'll only need to submit a full tax return if you're earning more than £3,000 from it.

For now, you still need to tell HMRC if you earn more than £1,000 from side hustles

The trading allowance is a tax exemption that means you can make up to £1,000 working for yourself each tax year without having to declare these earnings to HMRC. Working for yourself includes:

• Self-employment – for example, as a sole trader, freelancer or independent contractor;

• Casual work and side hustles – for example, tutoring, pet sitting, gardening, online content creation;

• Selling goods online with the intention of making a profit – in other words, buying or making items specifically to sell them on (NOT just having a clear out)

If you do any of these activities – or a combination of them – and you make more than £1,000 in total during the tax year, you'll need to file a self-assessment tax return (even if you made less than £1,000 from each one separately).

Alongside this, the property allowance lets you earn up to £1,000 renting out your whole home or another property without needing to declare that income. If you're renting out a single room in your house, this goes up to £7,500 under the Rent a Room scheme, which isn't changing for now.

For more on how this all works, see Do I pay tax on online earnings? The guide focuses on earnings from online platforms, but the guidance also applies to side hustles you may be doing offline.