In 2026, many savvy Londoners are taking up side hustles, utilising existing skills to give themselves additional streams of income. But which side hustles are the most popular?
Don’t sweat, we’ve got you covered. We’ll walk you through the whole process, from choosing a side hustle to getting it up and running, and what this means for tax compliance.
What are the most popular side hustles in London?
Some of the most popular hustles include:
- Reselling clothes
- Food delivery or rideshare services
- Tutoring
- Renting out property
- Dog walking or pet sitting
- Creative side hustles (such as photography, content, and handcrafted goods)
- Local services, like gardening or cleaning
Do I register with HMRC if I take up a side hustle?
It basically depends on whether you earn more than the Trading Allowance.
The Trading Allowance is a tax-free allowance, which allows UK taxpayers to earn up to £1,000 from self-employed or incidental income without even needing to report it.
An important thing to note here is that even if you have multiple side hustles, you still only get one Trading Allowance of £1,000 in each tax year – but you can use it alongside other forms of income. It means you can run that side hustle alongside the job you do for your employer, and still be entitled to the Trading Allowance.
So what happens if things go well and you earn more than £1,000? If your earnings are over this amount, you will need to register your side hustle for tax. This doesn’t automatically mean you owe tax though. Once you’ve deducted your expenses, it’ll depend on your overall profits, any other income you get, and how you set your business up for tax.
How do I register my business for tax?
The first step in setting up your own official business is choosing a legal structure for your business. This is really important, as the nature of the legal relationship between you and your business affects things like your obligations as a business owner, your reporting requirements, as well as how you ultimately pay tax.
Choosing a business structure
For most new business owners, it’s a choice between setting up a limited company or operating as a sole trader. What’s the difference, though?
- Well, if you set up a limited company, that means the business is legally distinct from you as the owner, and so any money it makes belongs to the company, not you. You’ll need to think about you pay yourself from the business.
- If you decide to register as a sole trader, on the other hand, then you and the business are legally the same – HMRC will see no legal distinction between the two.
There are things to consider about either of these options; this article compares sole traders to limited companies, explaining the differences and how your decision will affect you.
Do I need specialised skills to have a side hustle?
It depends on what you do! A side hustle is simply a secondary source of income that you have in addition to your main source, which is usually a full-time job.
You may benefit from having skills that set you apart, as many people are looking for specialised knowledge in a particular area. In other words, they want a specialist, not a generalist.
This is where having some kind of niche can be useful, giving you a way to stand out from the crowd in an increasingly competitive marketplace.
In all honesty, it depends on what you can do, and sometimes on how hard you’re prepared to market it.
What are the best platforms for side hustlers in London?
Right, so you’ve got your side hustle, but where are you supposed to find work? Thankfully, there are some great platforms and online marketplaces available. Our table below shows of the most commonly used.
| Freelancers |
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| Tutoring |
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| Food delivery or rideshare |
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| For selling goods |
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Tips for starting a side hustle
What skills do you have already? Consider your strengths and weaknesses, because it often helps to use these as the basis of the services you offer. For example, if you’re something of a wordsmith, why not teach English on the side?
Or if you have an eye for fashion, you might want to sell retro clothing on a platform like Vinted.
You also want to make sure you keep accurate and up-to-date records of all your business transactions and expenses, as this will save you a lot of time when it comes to filing your taxes (and prevent you from getting into trouble). It will help you keep track of your income so you know when it’s time register, and will make sure you claim for any allowable expenses too!
If you feel like you need help with this, don’t hesitate to speak to an accountant, who will be able to simplify the whole process and ensure you’re being as tax-efficient as possible.
Find more help with accounting and finance for your London-based business in our information centre.
