This month, we wanted to share several important updates that may affect many individuals and businesses over the coming months, particularly around side hustle income, Self Assessment obligations and the growing importance of protecting your business properly through insurance.

As always, if any of the topics below raise questions about your own circumstances, our team would be very happy to help.

Side Hustles, Self Assessment and HMRC: What You Need to Know in 2026

Over the last few years, we have seen a significant increase in the number of people earning additional income through side hustles and secondary income streams.

For some, this may be freelance consulting or online selling. For others, it could involve Airbnb income, content creation, tutoring, dog walking or property-related income. What often starts as a small project or hobby can quickly become a meaningful source of additional income.

However, HMRC is paying increasingly close attention to this area.

Many online platforms including eBay, Etsy, Vinted and Airbnb are now sharing seller data directly with HMRC under new reporting rules. Whilst this does not automatically mean tax is due, it does mean HMRC has far greater visibility over online income than many people realise.

At present, individuals can generally earn up to £1,000 in trading income before reporting requirements apply. Once combined side hustle income exceeds this threshold, there may be a requirement to register for Self Assessment and submit a tax return.

The Government has also announced plans to simplify reporting requirements in future for individuals earning between £1,000 and £3,000 from side hustles, although the current rules still apply for now.

Alongside this, Making Tax Digital for Income Tax is approaching for many self-employed individuals and landlords. From April 2026, those with qualifying income above £50,000 will need to comply with new digital reporting requirements, with thresholds reducing further in subsequent years.

Good record keeping and early professional advice are becoming increasingly important as HMRC modernises its systems.

If you have started generating additional income through a side business, freelance work or online activity and are unsure about your obligations, now is an excellent time to review your position.

You can read our full article here: https://www.richardrileyassociates.co.uk/2026/05/26/side-hustles-self-assessment-and-hmrc-what-you-need-to-know-in-2026/ 

Protecting Your Business: Our Insurance Partnership with Kingsbridge

Whilst we work hard to help clients manage their finances efficiently and remain compliant, we also recognise that running a business involves wider risks that many business owners overlook.

Even small mistakes or misunderstandings can sometimes lead to significant financial exposure. Professional advice disputes, accidental property damage, cyber risks or employee-related claims can all create unexpected costs for businesses of any size.

To help support our clients further, we are pleased to have partnered with insurance specialists Kingsbridge.

Their team can help businesses, contractors, freelancers and sole traders understand the types of insurance cover most relevant to their operations, including:

• Professional Indemnity Insurance
• Public Liability Insurance
• Employers’ Liability Insurance
• Cyber Liability Cover
• Legal Expenses Insurance
• IR35 Insurance

One of the reasons we chose to partner with Kingsbridge is their straightforward and practical approach. Their in-house team can provide clear guidance without unnecessary complexity and help businesses arrange appropriate cover efficiently.

If you would like to discuss insurance requirements for your business, get in touch.

Welcoming New Members of the Richard Riley & Associates Team

As our firm continues to grow, we are delighted to welcome several new members to the Richard Riley & Associates team. Each brings valuable experience, enthusiasm and personality to the business, and we are very pleased to have them on board.

Holley Victoria Ofiera

Holley joins Richard Riley & Associates with five years of experience in finance across both the commercial property and print solutions sectors. Her background includes purchase ledger, invoicing and credit control, and she particularly enjoys the balance of working with both numbers and people.

Holley is looking forward to continuing to develop her skills within accountancy and learning from the wider team. Outside of work, she enjoys spending time with family and friends and looking after her cocker spaniel, Arnie.

Charlotte Wheeler

Charlotte joined Richard Riley & Associates in February and has quickly become a valued member of the team. She describes herself as positive, reliable and easy-going, with a strong focus on building good relationships both professionally and personally.

After taking time out to raise her two children, Charlotte has returned to work with fresh energy and enthusiasm. Outside of work, she enjoys spending time with family, caring for animals and travelling.

Lorraine Reveley

Lorraine recently joined Richard Riley & Associates following a short period working with us as a temporary assistant. After deciding to return to college while her son was at school, Lorraine studied Business Administration and Bookkeeping before building a successful career spanning more than 30 years in finance.

Her experience includes 23 years working within Merton College Bursary and five years in the construction industry. Outside of work, Lorraine enjoys travelling, reading, swimming and spending time with family and friends, including supporting her grandson at football matches.

Bea Smith

Bea first joined Richard Riley & Associates in late 2024 on a part-time basis while balancing college studies alongside work. She now works full-time as an apprentice and is currently completing Levels 2 and 3 of her AAT qualification.

Outside of work, Bea enjoys teaching herself 3D motion editing and animation using After Effects, combining creativity with technical skills.

We are excited to have all four as part of the Richard Riley & Associates team and look forward to supporting them as they continue to grow and develop within the business.

Staying Ahead of Tax and Compliance Changes in 2026

Now that the new tax year is underway, many businesses and individuals are beginning to focus on the changes and compliance requirements that will affect them over the coming months and years.

With Making Tax Digital approaching for increasing numbers of taxpayers, growing HMRC visibility over online income and continued changes across the tax landscape, proactive planning has never been more important.

Whether you are:
• growing a side business
• managing rental properties
• preparing for Making Tax Digital
• planning for retirement
• reviewing business structures

Or simply wanting reassurance that your affairs are organised efficiently, our team is here to help.

Taking advice early often helps prevent unnecessary stress, missed deadlines and avoidable tax inefficiencies later on.

If you would like to arrange a review or discuss any aspect of your tax or accounting position, please do get in touch.

Best regards, Richard and the team

Richard Riley & Associates

Over the last few years, the number of people generating additional income through ‘side hustles’ has grown significantly across the UK.

For some, it begins as a hobby or passion project. For others, it is a way to supplement household income during a period of rising living costs. Increasingly, we are seeing individuals earning money through online selling, freelance work, content creation, Airbnb rentals, consulting, tutoring, dog walking and many other forms of secondary income.

However, as side hustles become more common, HMRC is also increasing its focus on ensuring that this income is reported correctly and taxed appropriately.

Many people are still unclear about when a side hustle becomes taxable, whether they need to complete a Self Assessment tax return and how upcoming changes may affect them. At Richard Riley & Associates, we are seeing growing numbers of individuals seeking clarity around their obligations and how best to stay compliant while managing additional income streams efficiently.

When Does a Side Hustle Become Taxable?

One of the biggest misconceptions surrounding side hustles is the belief that small amounts of income “do not count” for tax purposes. In reality, the rules are more nuanced.

Currently, individuals in the UK benefit from a £1,000 trading allowance. This means that if your total trading income from side hustles is £1,000 or less during a tax year, you generally do not need to report it to HMRC or pay tax on it.

However, once your trading income exceeds £1,000, you may need to register for Self Assessment and submit a tax return.

Importantly, this applies to your total combined side hustle income rather than each individual activity separately. For example, if you earn £700 from online selling and £500 from freelance work, your combined trading income would exceed the threshold.

HMRC will also consider the nature of the activity itself. Selling unwanted personal possessions occasionally is generally very different from buying or creating items with the intention of making a profit on a regular basis.

HMRC has recently launched its ‘Tax Help for Hustles’ campaign to help individuals better understand whether they may need to pay tax on income generated through side hustles and online platforms. The campaign specifically targets people earning money through:

• online selling
• content creation
• freelance work
• renting out property or rooms
• dog walking and other services

The campaign highlights that many people may have tax obligations without realising it, particularly where side income is becoming more regular or profitable.

HMRC Has Greater Visibility Than Ever Before

Another important development is the increasing amount of information being shared directly with HMRC by online platforms.

Digital marketplaces and platforms such as eBay, Vinted, Etsy and Airbnb are now required to provide certain seller data to HMRC under international reporting rules.

This does not automatically mean tax is owed in every case. Many people selling second-hand personal items will not have any tax liability at all.

However, it does mean that HMRC has far greater visibility over online income than many people realise.

As a result, maintaining accurate records and understanding your reporting obligations has become increasingly important for anyone generating additional income online.

A Simpler System Is Coming for Smaller Side Hustles

In response to growing concerns around administrative burdens, the Government has announced plans to simplify the reporting process for individuals with smaller side hustle incomes by 2029.

Under the proposed changes, individuals earning between £1,000 and £3,000 from side hustles will eventually no longer need to complete a full Self Assessment tax return. Instead, HMRC plans to introduce a simpler online reporting system allowing people to declare income and pay any tax due through a streamlined digital service.

This change is expected to remove hundreds of thousands of people from the Self Assessment system altogether.

It is important to understand, however, that this does not mean the first £3,000 of side hustle income will become tax-free.

The existing £1,000 trading allowance remains unchanged. Income above this level may still be taxable depending on your wider income position and personal circumstances.

At present, the new simplified reporting system has not yet been introduced, meaning the current rules still apply for now.

Making Tax Digital Is Also Approaching For Some

Alongside changes to Self Assessment, many side hustlers and self-employed individuals will also need to prepare for Making Tax Digital (MTD) for Income Tax.

From April 2026, individuals with qualifying self-employed or property income exceeding £50,000 will be required to comply with Making Tax Digital requirements. This threshold then falls to £30,000 next year and £20,000 the year after, catching even more people.

This will involve:

• maintaining digital financial records
• using compatible software
• submitting quarterly updates to HMRC
• completing an end-of-year finalisation process

For individuals whose side hustle income is growing quickly, this is particularly important.

Many side businesses that begin casually can become substantial sources of income over time, especially in areas such as online retail, consulting, content creation and property income.

Preparing early for digital record keeping and more regular reporting can help avoid unnecessary stress later.

The Importance of Good Record Keeping

One of the most common problems we encounter is individuals failing to keep adequate records of their side hustle income and expenses.

Good record keeping is essential for:

• calculating taxable profits accurately
• claiming allowable expenses correctly
• responding to HMRC queries if required
• preparing for future digital reporting obligations

Even relatively small side hustles can quickly become complicated when combined with employment income, rental income, dividends or other investments.

Maintaining clear records from the outset usually makes things significantly easier in the long term.

Seeking Advice Early Can Prevent Costly Mistakes

For many people, side hustles start informally and evolve gradually over time. As a result, it is easy to underestimate when tax obligations begin to apply.

Seeking professional advice early can help you:

• understand whether you need to register for Self Assessment
• identify allowable expenses
• avoid penalties or missed deadlines
• prepare for Making Tax Digital
• structure growing income streams efficiently

As HMRC continues modernising its systems and increasing visibility over digital income, proactive planning and compliance are becoming more important than ever.

At Richard Riley & Associates, we work closely with self-employed individuals, landlords, business owners and those with additional income streams to help ensure their tax affairs remain accurate, compliant and efficiently managed.

If you are earning income through a side hustle and are unsure about your reporting obligations, now is an excellent time to review your position before future changes come into effect.

From April next year, defined contribution pension schemes will once again form part of an individual’s estate for inheritance tax (IHT) purposes. This represents a significant shift in how pensions are treated and has important implications for long-term financial and estate planning.

For many individuals, particularly those with substantial pension entitlements, this change may increase the potential inheritance tax exposure on their estate. As a result, it is more important than ever to understand the options available and take a proactive approach to planning.

Understanding the Change

Historically, pension benefits have often been considered an efficient way to pass on wealth, as they could sit outside of an individual’s estate for inheritance tax purposes.

However, with defined contribution pensions now being brought back into scope for IHT, their value may be included when calculating the overall estate on death. This could push some estates above the available tax-free thresholds, resulting in a higher tax liability for beneficiaries.

Given that inheritance tax is typically charged at 40% on the value of an estate above the nil-rate band (and any applicable allowances), the potential impact should not be underestimated.

Why Early Planning Is Essential

Inheritance tax planning is most effective when it is approached early and reviewed regularly.

Unlike some areas of tax planning, many of the strategies used to mitigate inheritance tax rely on time, particularly where lifetime gifting is concerned. Leaving planning too late can significantly limit the options available.

With this in mind, individuals with defined contribution pensions should consider reviewing their wider estate position and exploring appropriate strategies well in advance.

Taking a Tax-Free Lump Sum

One option available to many pension holders is to take up to 25% of their pension as a tax-free lump sum.

By doing so, individuals can:

• Remove a portion of the pension from the scheme

• Gain greater flexibility over how those funds are used or distributed

• Potentially begin implementing other estate planning strategies

However, it is important to consider how these funds are managed once withdrawn. If retained within the estate, they may still be subject to inheritance tax. As such, this approach is often most effective when combined with further planning.

Gifting to Family Members

Lifetime gifting remains one of the most widely used and effective ways to reduce inheritance tax exposure.

By gifting assets to family members, individuals can reduce the value of their estate. However, there are important rules to be aware of.

In most cases, gifts fall under what are known as “potentially exempt transfers.” This means that if you survive for seven years after making the gift, it becomes fully exempt from inheritance tax. 

However, if you pass away within seven years, the gift may still be subject to tax. In these circumstances, a sliding scale known as taper relief may apply, reducing the amount of tax payable depending on how many years have passed since the gift was made.

This reinforces the importance of planning early, as the full benefit of gifting strategies is only realised over time.

Making Use of Annual Allowances

There are also specific gifting allowances that can be used each tax year without affecting the seven-year rule.

These include:

• The annual exemption (currently £3,000 per individual)

• Small gifts allowance

• Gifts made out of surplus income, provided certain conditions are met

While these allowances may appear modest, when used consistently over time they can contribute meaningfully to reducing the overall value of an estate.

Spending and Lifestyle Planning

Another, often overlooked, aspect of inheritance tax planning is the simple use of capital during one’s lifetime.

This may include:

• Supporting family members with education or property purchases

• Enhancing personal lifestyle or retirement plans

• Reallocating wealth in a way that aligns with personal priorities

While this is not a tax strategy in the traditional sense, reducing the value of the estate naturally reduces the potential inheritance tax liability.

Reviewing Your Overall Estate Structure

The reintroduction of defined contribution pensions into the inheritance tax framework highlights the importance of taking a holistic view of your financial position.

This may involve:

• Reviewing wills and estate planning arrangements

• Considering the use of trusts where appropriate

• Ensuring pension nominations are up to date

• Aligning pension planning with broader financial goals

Each individual’s circumstances will differ and there is no one-size-fits-all approach. Tailored advice is essential to ensure that any strategy is both effective and appropriate.

Avoiding Common Pitfalls

A common mistake is assuming that pensions will automatically remain outside the scope of inheritance tax or delaying planning until later in life.

In reality, the earlier these matters are addressed, the greater the range of options available.

It is also important to ensure that any actions taken, particularly around gifting, are properly documented and structured to comply with HMRC requirements.

Start Planning Now 

The inclusion of defined contribution pensions within inheritance tax calculations represents a meaningful change, but it also presents an opportunity to revisit and strengthen your estate planning strategy.

By taking a proactive approach, you can:

• Reduce the potential tax burden on your beneficiaries

• Gain greater control over how your wealth is distributed

• Ensure your financial plans align with your long-term intentions

At Richard Riley & Associates, we work with individuals and families to provide clear, practical guidance on inheritance tax and estate planning.

We can help you understand how these changes affect your specific situation, identify appropriate strategies to minimise tax exposure and put a structured plan in place for the future

If you would like to review your position or discuss your options in more detail, please do get in touch with our team. Early advice can make a significant difference to the outcome.

As we begin a new tax year, there are several important changes and considerations that may affect you or your business. Taking a proactive approach now can help you stay compliant, avoid unexpected costs and plan more effectively for the months ahead.

Below is a summary of the key updates and what they mean in practice.

Starting the New Tax Year on the Right Foot

The new tax year presents an opportunity to review your financial position and set clear plans in place. Whether you are running a business, managing a property portfolio or handling personal tax affairs, early planning allows you to make informed decisions and avoid unnecessary pressure later on.

Find out more

Making Tax Digital (MTD) Is Now in Force

Making Tax Digital is now a requirement for self-employed individuals and landlords earning over £50,000.

This means:

• Maintaining digital financial records
• Submitting quarterly updates to HMRC
• Completing an end-of-year declaration

There is also a new penalty points system for late submissions and payments, which can lead to fines if thresholds are exceeded.

This represents a significant shift from the traditional annual tax return and many will need to adapt their processes to remain compliant.

Read more

Capital Gains Tax Changes for Business Owners

If you are considering selling your business, it is important to be aware that Capital Gains Tax may now apply at a rate of 18% on qualifying gains.

Crucially, this tax is payable at the point of completion of the sale, even if the proceeds are received over time in instalments.

This can create cash flow challenges if not factored into negotiations, so early planning and advice are essential.

Read our latest blog on CGT changes

Rising Employment Costs

Recent increases to both minimum wage and employer National Insurance will have a direct impact on businesses with employees.

As of 1st April, the UK National Living Wage (21 and over) has increased by 50p to £12.71 per hour. 18-20 year olds will receive £10.85 (85p increase) and 16-17 year olds/apprentices will receive £8.00 (45p increase).

For many, particularly in sectors such as retail and hospitality, this will affect margins and overall cost structures.

Now is a good time to review:

• Staffing levels and shift patterns
• Pricing strategies
• Payroll accuracy and forecasting

Understanding the financial impact early can help you make more informed decisions.

Get in touch if you have any questions

Inheritance Tax and Pension Changes

From April next year, defined contribution pension schemes will once again be included within an individual’s estate for inheritance tax purposes.

There are steps that may help mitigate the impact, such as:

• Taking up to 25% of your pension as a lump sum
• Gifting assets during your lifetime

However, gifts are only fully exempt from inheritance tax if you survive for seven years, with a sliding scale applied if this is not the case.

This is an area where careful, forward-looking planning is particularly important.

Read our latest blog on Pensions and Inheritance Tax

Cash Flow and Ongoing Planning

With multiple changes now in effect, maintaining a clear and up-to-date view of your financial position is more important than ever.

Regular reviews, accurate record-keeping and forward planning can help you:

• Anticipate tax liabilities
• Manage cash flow effectively
• Avoid last-minute decisions

We are here to help

The common theme across all of these updates is the importance of planning ahead.

Whether you need support with:

• Making Tax Digital compliance
• Business accounting and forecasting
• Tax planning or structuring
• Property or personal tax matters

We are here to provide clear, practical advice tailored to your situation.

If you would like to discuss any of the above or review your position for the year ahead, please do get in touch.

For many business owners, the sale of a company represents the culmination of years of hard work. It is a significant financial milestone and as a result, much of the focus is placed on achieving the best possible sale price and securing favourable deal terms.

However, one area that is sometimes overlooked until it is too late is the tax position, specifically the impact of Capital Gains Tax (CGT).

Recent changes mean that entrepreneurs may now be subject to CGT at a rate of 18% on qualifying gains when selling their business and the government have hinted that they may look to increase this so it is aligned with income tax in the future, so there maybe further increases to come. While the rate itself is important, it is the timing and structure of the tax liability that can have the most significant practical impact.

Understanding the Timing of Capital Gains Tax

A key point that business owners must be aware of is that Capital Gains Tax becomes payable at the point the sale completes.

This is critically important because, in many transactions, the agreed sale proceeds are not always received as a single lump sum. It is common for deals to be structured with deferred consideration, where payments are made in instalments over a period of time.

Despite this, the tax liability is calculated based on the full gain at completion not in line with when the cash is received.

This can create a situation where a business owner faces a substantial tax bill before they have received the full proceeds from the sale.

The Cash Flow Implications

Without careful planning, this mismatch between tax liability and cash receipts can lead to significant cash flow pressure.

For example, if a portion of the sale proceeds is deferred over several years, the seller may still be required to fund the tax liability upfront. This can mean:

• Using personal funds to meet the tax obligation
• Negotiating less favourable payment terms in order to access more cash at completion
• Or, in some cases, facing financial strain at a time that should otherwise be a positive transition

These risks highlight why tax should not be treated as an afterthought.

The Importance of Structuring the Deal Correctly

The structure of a business sale can have a material impact on the overall tax position.

Considerations may include:

• The proportion of upfront versus deferred consideration
• The use of earn-outs or performance-based payments
• The allocation of value across different elements of the transaction
• The availability of any reliefs or allowances

Each of these factors can influence not only the total tax payable, but also when it becomes due.

By seeking advice early in the process, business owners are in a stronger position to negotiate terms that align with both their commercial and tax objectives.

Negotiation Leverage and Informed Decision-Making

Entering into negotiations without a clear understanding of the tax implications can put business owners at a disadvantage.

For instance, a headline offer that appears attractive may be less favourable once tax liabilities and payment timing are taken into account.

Conversely, a slightly lower offer with a higher proportion of upfront cash may, in practical terms, deliver a better outcome.

Having clarity on these points allows for more informed decision-making and ensures that negotiations are approached with a full understanding of the net position.

Avoiding Last-Minute Complications

One of the most common challenges we see is business owners seeking tax advice only once a deal is close to completion.

At this stage, there is often limited flexibility to restructure the transaction, and opportunities to improve the tax position may have already been lost.

Early engagement allows for:

• Proper planning and scenario modelling
• Identification of potential risks
• Time to implement appropriate structures
• Greater confidence throughout the process

In many cases, relatively small adjustments made early on can result in significantly better outcomes.

Taking a Proactive Approach

Selling a business is not simply a commercial transaction, it is also a complex financial and tax event.

A proactive approach, where tax considerations are integrated into the planning and negotiation stages, can help to protect the value you have built, avoid unexpected liabilities and ensure sufficient liquidity to meet obligations. This will help provide clarity and peace of mind at a time when you are likely to be juggling multiple demands on your time and energy.

How We Can Help

At Richard Riley & Associates, we work closely with business owners at every stage of the sale process.

Our role is to provide clear, practical advice that enables you to understand your tax position, explore your options and structure your transaction in a way that supports your overall objectives.

If you are considering selling your business, whether in the near future or further ahead, it is never too early to seek advice. Planning ahead can make a significant difference to both the outcome of the transaction and your financial position afterwards.

If you would like to discuss your plans in confidence, please do get in touch with our team.