Britain is fast becoming a nation of moonlighters, with more than 16 million people now running a side hustle and earning hundreds of pounds a month to cope with the cost-of-living crisis – but HMRC is now sounding the alarm.
This marks a 158% increase since 2023, when just 6.2 million Brits were estimated to have a side hustle, according to figures reported by Patrick Cannon, Barrister-at-Law.
New research by side hustle experts at OddsMonkey, covering 2025, shows that almost two in five Brits (39%) earn extra income on the side, pulling in an average of £914 a month (£210 a week).
Yet with millions failing to declare what they earn, the taxman is urging workers planning a side hustle in 2026 to make sure they stay on the right side of the rules.
Despite rising average wages, the commissioned research by OddsMonkey which polled 2,000 Brits, discovered that nearly half of them (48%) fear they can’t cover household bills, while 28% worry about rent or mortgage payments.
As a result, side hustles have exploded – from selling old clothes online and baking cakes to blogging, freelancing and renting out spare rooms.
The most popular way to earn extra cash is by selling unwanted items:
- 68% sell second-hand goods online via platforms such as Vinted, eBay and Depop
- Average earnings: £165 per month
Other popular side hustles include selling crafts (£163), baking goods (£183), renting out a spare room (£241), blogging (£231), and selling beauty products (£249 per month – the most profitable).
While beauty sales bring in the biggest returns, crafting and baking were rated the most enjoyable, showing Brits want extra income without sacrificing happiness.
Forty-three per cent of men run a side hustle, compared to 34% of women, and three in five Gen Z workers earn extra income, making them the most likely generation to run a side hustle.
Meanwhile, 55% of Millennials have a side hustle, earning an average of £1,321 a month. Students are also cashing in, earning an average of £895 a month from side hustles, often without parental financial support.
Despite the majority earning nearly £3,000 a year extra on average, 34% of side hustlers admit they don’t declare their income to HMRC.
HMRC has warned that casual sellers clearing out wardrobes or garages don’t need to worry, but anyone earning more than £1,000 a year from selling goods or services may need to declare it. Selling personal items worth more than £6,000 in a single sale could also trigger capital gains tax.
Anyone who needs to declare income may be required to register for Self Assessment as a sole trader, with HMRC warning that failure to do so could result in unexpected tax bills or penalties. You can check if you need to do so here.
Peter Watton, spokesman for OddsMonkey, said, “With the constantly increasing cost of living, we were hardly surprised that Brits are having to take up side hustles in order to earn themselves some extra cash.
While it is great that Brits are using their passions to earn extra income, it is important to remember to declare any income over £1,000 to ensure you don’t get in trouble with the tax man.”
“With millions already relying on second incomes and younger generations leading the charge, side hustles are now part of everyday British life.
“But as HMRC increases its focus on additional earnings in 2026, experts warn that what starts as a harmless hustle could quickly become a costly mistake if the rules aren’t followed.
