Recent research from Credit Karma UK has revealed that around a quarter of UK adults now have a second or third job, or a ‘side hustle’ to supplement their income. The research suggests that the lasting impact of the COVID-19 pandemic has been the catalyst that has forced people to seek extra work outside their regular jobs.
Side Hustles are not just for younger people too, with many people aged over 50 now looking to help boost their income. According to the study, 42 per cent of respondents say they started their side hustles as a direct response to the financial constraints brought by the pandemic, while 61 per cent admitted that their financial stability was dependant on the success of their side hustle.
One in 10 side hustlers invested in cryptocurrencies, and six per cent earned extra money from taking part in secondhand fashion, while five per cent participated in focus groups.
With 16 per cent of men having a side hustle, compared to nine per cent of women, men bring home an extra £840 on average, while women make £670 extra per month, creating a gender gap of more than £2,000 per year.
However, 49 per cent of side hustlers said that the emergency tax imposed on entrepreneurs with multiple ventures had impacted their ability to supplement their income. Around 59 per cent of respondents said they believe that emergency tax is unfair.
Emergency tax can be issued when HMRC does not get someone’s income details in time after a change in circumstances, such as a change in job, moving from self-employed to employed and getting on the state pension.
Ziad El Baba, General Manager at Credit Karma UK, warned that HMRC’s emergency tax does affect the ability of young entrepreneurs to thrive.
He said: “As a nation, we’ve shown extreme flexibility and ingenuity in the face of a crisis, and really demonstrated just how entrepreneurial we are.
“But with more and more people working additional jobs or finding new income streams, it feels like emergency tax is an outdated millstone around the neck of those simply seeking financial stability.”
If you’re looking to explore the opportunities a side hustle can bring you, you would be wise to assess the tax implications first. If you’re looking for tax accountants in Manchester, talk to us today.