In today’s fast-paced world, it’s not uncommon to find professionals with more than one stream of income. A makeup artist might sell skincare products online, a DJ may rent out a flat on Airbnb, and a property investor could also host wellness retreats.
Having multiple income streams is smart it builds financial resilience, unlocks growth, and provides a safety net. But it also brings tax responsibilities that can be overwhelming if you’re not organised.
Whether you’re an entertainer, a property investor, or a health & beauty professional, this guide will walk you through how to manage your side hustles like a pro and stay in HMRC’s good books.
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Who Needs to Read This?
This article is for you if:
- You’re a performer who also runs paid workshops
- You rent out a property while offering freelance beauty services
- You’re earning from both service-based work and digital products
- You have side gigs in addition to your main business
1. Know What Counts as Taxable Income
HMRC requires you to declare all sources of income whether or not it’s your “main” job. Common examples include:
Entertainers:
- Gig payments
- Sponsorships & brand deals
- Music or video royalties
- Teaching or training services
Property Investors:
- Residential or commercial rent
- Airbnb or short-term lets
- Income from property sales (Capital Gains)
- Property management fees (if self-managed)
Health & Beauty Professionals:
- Salon or mobile services
- Product sales (e.g. haircare, skincare, wellness kits)
- Paid online tutorials or workshops
- Affiliate income or brand collaborations
Even small income from “side gigs” must be reported if it goes over the £1,000 trading allowance per year.
2. Register with HMRC
If you’re earning more than £1,000 from side activities (total), you must register for Self Assessment.
You’ll need to:
- Register as self-employed (if not already)
- Submit an annual Self Assessment tax return
- Report each income stream separately if they are distinct activities
Example: If you’re a beautician who also earns rent from a spare room, declare service income under “self-employment” and rental income under the “UK property” section of your tax return.
3. Track Each Income Stream Separately
A big mistake people make is lumping everything together. HMRC needs clarity and you need it too when claiming expenses or preparing for tax season.
Best Practices:
- Keep digital or physical folders for each income stream
- Track earnings, invoices, and expenses separately
- Use category tags if using software like Xero or QuickBooks
Tools to Help:
- QuickBooks (for freelancers and self-employed pros)
- Hammock (for property income tracking)
- FreeAgent (ideal for creative professionals and side hustlers)
4. Know What Expenses You Can Deduct
Each income stream has unique, HMRC-allowable expenses. Here’s what’s commonly claimable:
For Entertainers:
- Travel to gigs or shoots
- Equipment (lighting, instruments, props)
- Software subscriptions (e.g. editing tools, music libraries)
- Website & marketing costs
For Property Investors:
- Letting agent fees
- Mortgage interest (for buy-to-let)
- Repairs and maintenance (but not improvements)
- Council tax, utilities (for short-term lets)
For Beauty & Wellness Professionals:
- Product stock and supplies
- Rent for treatment rooms or salon chairs
- Training and certifications
- Insurance and client booking systems
Important: Shared costs (e.g. phone, internet, home office) should be apportioned fairly between personal and business use.
5. Set Aside Money for Tax
Unlike a PAYE job, side hustles don’t have tax deducted automatically. If you’re not setting money aside, the January 31st Self Assessment deadline can be painful.
What to Do:
- Save 20–30% of your net income from each stream into a tax reserve account
- Monitor your earnings monthly to stay ahead
- Don’t forget National Insurance Contributions (Class 2 or Class 4 may apply)
- Keep VAT in mind if your combined income across all business activity exceeds £90,000/year
6. Don’t Forget Capital Gains and Other Taxes
Selling a rental property? You may owe Capital Gains Tax (CGT) and you must report this within 60 days of the sale.
Running an Airbnb or renting rooms? You may need to consider:
- Furnished Holiday Let rules (if applicable)
- Rent-a-Room relief (up to £7,500/year tax-free)
Make sure you understand which tax rules apply to your situation.
7. Hire an Accountant Who Understands Your Industry
Having an accountant is not just for large businesses. It’s essential when juggling multiple income streams especially when each has different tax rules, thresholds, and expenses.
Find one who:
- Understands the entertainment, property, or beauty industry
- Is up-to-date with HMRC guidance and MTD requirements
- Helps you claim what you’re legally entitled to
- Saves you time and stress with quarterly reviews and filings