Don’t Forget About Tax

Regardless of which type of second income you decide to go for, make sure you don’t forget about your tax. If you earn less than £1,000 in the tax year from a second income, you don’t need to pay any extra tax. This is known as your trading allowance.

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If you earn over that, you need to start keeping track of all your income and expenditure, because you’ll need to complete a self assessment tax return. Don’t worry, if you’re just earning a few thousand a year it won’t be too difficult.

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You should set aside the amount of tax you expect to pay, otherwise you might be in for a bit of a shock when the tax bill comes in from HMRC.