October 2026 Newsletter
Side Hustles, Deadlines & Getting Ahead
October is here, and this month we’ve got a bit of everything – from cake sheds and side hustles to Self Assessment, Companies House and, yes, a little bit of Making Tax Digital.
From cake sheds to online selling, more people are making extra money from hobbies and side hustles but when does HMRC need to know?
As we head towards the final few months of 2026, now is a good time to get ahead of some of the deadlines coming our way rather than leaving everything until January.
So, grab a cuppa (cake optional) and here’s what you need to know this month.
Cake Sheds, Side Hustles & the Taxman – When Does a Hobby Become a Business?
We couldn’t resist this one.
This month there has been plenty of chatter about so-called “cake sheds” – those lovely little honesty-box stalls you might spot at the end of someone’s drive selling homemade cakes, brownies, eggs, flowers or other goodies.
Behind the slightly amusing headlines is actually a useful tax question:
When does making a bit of extra money from something you enjoy become a business as far as HMRC is concerned?
Because it isn’t really about whether you have a shop, a website, a company name or even whether you think of yourself as a business.
You might be:
- Baking cakes to sell from the end of your drive
- Selling handmade items online
- Buying and reselling clothes or collectibles
- Making crafts for local markets
- Doing beauty treatments at weekends
- Pet sitting or dog walking
- Tutoring
- Selling regularly through online marketplaces
- Turning another hobby or skill into a little extra income
None of these automatically means you have a tax bill.
But there can come a point where HMRC considers what you’re doing to be trading.
The £1,000 trading allowance
There’s a useful figure to remember: £1,000.
If your annual gross trading income is £1,000 or less, you may be covered by the trading allowance and generally won’t need to tell HMRC about that income, although there are circumstances where different rules apply.
And that £1,000 is income, not profit.
So if you sell £1,200 worth of cakes but spend £600 on ingredients, boxes and other costs, your gross trading income is still £1,200 when considering the £1,000 threshold.
If your gross trading income exceeds £1,000, you may need to tell HMRC and register for Self Assessment.
But what if I’m just selling my old stuff?
This is where another common misconception appears.
Selling your own unwanted possessions doesn’t automatically make you a trader.
Clearing out your wardrobe and selling clothes you no longer wear is very different from deliberately buying clothes with the intention of reselling them for profit.
Likewise, selling old furniture, children’s toys or bits from the garage doesn’t suddenly mean HMRC wants a cut of every sale you make online.
It’s the nature of what you’re doing that matters.
If you’re regularly making or buying things specifically to sell for profit, that’s much more likely to look like trading.
“But I only do it on the side…”
That’s exactly why it’s called a side hustle!
Having a full-time job doesn’t prevent another activity from being taxable. Income from a side business may still need to be declared alongside your employment income.
So whether it’s cakes from a shed, crafts from the kitchen table or a growing little online empire, don’t wait until it becomes sizeable before thinking about the tax side.
Jenner’s Tip
Keep records from day one – even if you think it’s “just a hobby”.
Keep track of what comes in and what you spend. If your little side hustle takes off, you’ll be very glad you did.
And if you’re sitting there thinking, “Hang on. I make a bit of money from ______. Does this apply to me?” – give us a call.
We promise not to confiscate the cake.
January You Will Thank The October You
Yes, we know.
Nobody really wants us talking about the January Self Assessment deadline in October.
But hear us out.
The deadline for submitting your 2025/26 online Self Assessment tax return and paying the tax due is 31 January 2027.
That sounds comfortably far away.
It isn’t.
Christmas has an irritating habit of appearing between October and January, and suddenly that lovely three-month window becomes considerably smaller!
If you haven’t already started gathering your information, now is an excellent time to do it.
Think about:
- Bank statements
- Sales and income records
- Purchase invoices and receipts
- Expenses
- Mileage records
- Property income and expenditure
- Pension information
- Investment information
- Details of any other taxable income
- Anything your accountant has already asked you for
If you still submit your Self Assessment return on paper, the normal deadline is much sooner: 31 October 2026.
And remember, getting your tax return completed earlier doesn’t mean you have to pay your tax earlier.
It simply gives you more notice of what you owe and more time to plan for it.
Jenner’s Tip
Give January You a break.
Send your information to your accountant before the Christmas decorations come out, rather than finding it underneath them in January.
The sooner your return is prepared, the sooner you’ll know your tax position – and knowing the number is usually much better than worrying about what the number might be.
Companies House Identity Verification – Have You Done Yours?
If you’re a company director or a Person with Significant Control (PSC), Companies House identity verification should now be firmly on your radar.
Identity verification became a legal requirement from 18 November 2025, with Companies House introducing the requirements over a 12-month transition period.
Importantly, 18 November 2025 was the start of the process, not one universal deadline for everyone.
For existing directors, identity verification is linked to the company’s confirmation statement. Directors need to provide their Companies House personal code as part of the company’s next confirmation statement filing during the transition period.
PSCs also need to verify their identity, although their individual deadline depends on their circumstances.
If you’re both a director and a PSC, there can be separate requirements relating to each role.
Once your identity has been successfully verified, you’ll receive a personal code. If you’re a director of several companies, you don’t have to verify your identity separately for every company – you use your personal code for the relevant appointments.
With the transition period moving towards its conclusion in November, now is a sensible time to check that everyone who needs to verify has either done so or knows what they need to do.
Jenner’s Tip
Don’t leave Companies House compliance until the confirmation statement is due.
Check the directors and PSCs connected to your company now and make sure everyone understands what they need to do.
A quick check today could prevent an annoying last-minute problem later.
Making Tax Digital – Your Next Quarterly Update Is Coming
We promised not to make the whole newsletter about Making Tax Digital, but we couldn’t completely ignore it!
If you’re already using Making Tax Digital for Income Tax, your next important date is approaching.
The deadline for the second quarterly update is 7 November 2026.
For those using the standard update periods, this update covers information from 6 April to 5 October 2026. If you use calendar update periods, it covers 1 April to 30 September 2026.
Quarterly updates are created using the digital records held in your compatible software and provide HMRC with summaries of your business income and expenses.
One useful thing to understand is that the updates are cumulative. Your second update therefore includes information from the beginning of the tax year rather than simply reporting the latest three months in isolation.
For 2026/27, HMRC has said that penalty points will not be issued for late quarterly updates.
That doesn’t mean you can forget about them, though.
You still need to keep the required digital records and submit your quarterly updates before you can submit your tax return.
The following quarterly deadlines are:
7 February 2027 – Third quarterly update
7 May 2027 – Fourth quarterly update
Jenner’s Tip
MTD works much better when the bookkeeping happens throughout the year.
If every quarterly deadline results in a frantic search for receipts, invoices and missing transactions, the problem probably isn’t MTD – it’s the process behind it.
And that’s something we can help you sort out.
Your Questions Answered
Q: I sell things on Vinted, eBay or Facebook. Do I automatically have to pay tax?
No.
Simply selling your own unwanted possessions doesn’t automatically mean you’re trading or that the money is taxable as trading income.
However, if you’re buying or making things specifically to sell for profit, or carrying on an activity in a way that amounts to trading, the position can be different.
Online platforms may also have reporting obligations of their own. A platform reporting information to HMRC does not automatically mean you owe tax.
If you’re unsure whether what you’re doing counts as trading, ask us.
Q: I’ve made more than £1,000 from my side hustle. Do I pay tax on everything over £1,000?
Not quite.
The £1,000 trading allowance isn’t simply a tax-free band where you automatically pay tax on everything above it.
If your gross trading income exceeds £1,000, you will generally need to consider whether you need to register for Self Assessment.
When calculating taxable profit, you may then be able to use the £1,000 trading allowance instead of deducting actual allowable business expenses.
Which option works best will depend on your circumstances.
That’s why keeping keeping records of your actual expenses is still important.
Q: If I submit my Self Assessment return now, do I have to pay the tax straight away?
No.
Submitting your tax return early doesn’t bring forward the normal payment deadline.
For the 2025/26 tax year, tax due under Self Assessment is normally payable by 31 January 2027.
Filing earlier simply means you know what you owe sooner, giving you more time to plan your cash flow.
And we think that’s considerably nicer than finding out the number on 30 January.
Q: We’re already thinking about the Christmas party. Can the business pay for it?
Yes, potentially – and there is a useful tax exemption for annual staff events.
For an annual event such as a Christmas party to qualify for the exemption, it generally needs to be open to all employees and the total cost must not exceed £150 per head, including VAT.
And here’s an important bit: the £150 is not an allowance.
If the cost of an event goes over the qualifying limit, the whole amount can become taxable rather than just the excess.
There are also rules where you hold more than one annual event during the year, so if you’re planning something substantial, check the position before you book.
Dates for Your Diary
5 October 2026
Deadline to notify HMRC if you need to register for Self Assessment for the 2025/26 tax year.
22 October 2026
Electronic payment deadline for 2025/26 PAYE Settlement Agreements.
31 October 2026
Normal deadline for HMRC to receive paper Self Assessment tax returns for the 2025/26 tax year.
7 November 2026
Second quarterly update deadline for most taxpayers currently using Making Tax Digital for Income Tax.
30 December 2026
Deadline for submitting your online 2025/26 Self Assessment return if you want HMRC to consider collecting eligible tax through your PAYE tax code.
31 January 2027
Deadline for online 2025/26 Self Assessment tax returns and payment of tax due.
7 February 2027
Third MTD for Income Tax quarterly update deadline.
A Final Thought from Jenner’s
Whether you’re running a limited company, working for yourself, renting out property or discovering that the cakes you’ve been selling from the end of the drive have accidentally turned into a thriving little business, tax doesn’t need to be something you only think about when a deadline appears.
A little organisation throughout the year makes everything easier.
And if you’ve read something this month that’s made you think:
“Hmm… I wonder if that applies to me?”
Don’t Google yourself into a panic.
Ask us.
That’s what we’re here for.
Jenner’s Tax and Business Advisors
Practical advice. No unnecessary jargon.
The information in this newsletter is intended as general guidance and should not be treated as individual tax or financial advice. Your circumstances may differ, so please speak to us if you’re unsure how any of the points covered affect you.
Need personalised advice?
If any of this month’s topics affect you or your business, we’re here to help.
Contact our team at Jenners Tax & Business Advisers for tailored support and practical guidance.
Check out all of services pages today.
Call us on 01432 379988 or use the contact us page.
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