Side hustles and tax evasion

All of the statistics behind who’s making tax-free money in the gig economy

Noi Rotstein

by , Insights & Marketing Executive

Having a side hustle is a growing trend around the world, where you make money on the side that’s not part of your normal 9-to-5 job. However, like any other job out there, taxes still need to be paid. Our recent study found that an estimated 5.7 million of us aren’t declaring our side hustle income, which results in an estimated £23.5 billion made off the books.

What is the gig economy?

The gig economy is where side hustles thrive. Spending your spare time writing a blog? Renting out your spare room? Walking someone else’s dog? These are all part of the gig economy. It’s all about short-term, flexible jobs, where you’re paid for each piece of work or gig, rather than steadily working for the one employer. The downside? Lots of us aren’t doing it legally.

Tax evasion

A study we conducted found that the average Brit is earning £4,124 on the side each year and not declaring it to the HMRC.

Let’s put this into perspective. There are 30.3 million taxpayers in the UK. The most recent data from GOV.UK found that the tax gap in the UK – which is the gap between what the government should be getting in taxes, and what they actually do – amounted to £36 billion for the 2014/15 financial year. Of this, £2 billion is attributed to those who pay tax on their regular job, but don’t on their additional income.

5.7 million

Brits don’t declare their side hustle money.

£23.5 billion

Of tax-free money earned through side hustles last year.


The average Londoner made tax-free, making it the top region in the UK.


Of Millennials made money and didn’t declare it, the highest proportion out of any generation.


The average man made off the books, compared to only £3,091 for women.


Of men made side hustle money without declaring it, compared to women at only 8.3%.

Who is hiding the most money from the HMRC?

Millennials have the highest proportion of those making money on the side without declaring it at 27.7%. This is followed by Gen X at 14.05% and even some Baby Boomers, at 6.9%. It also turns out that Baby Boomers are making the most money tax-free, at £5,660 on average compared to Millennials (£5,503) and Gen X (£2,030).

Average amount of tax-free side hustle money made per year, by generation

Average amount of tax-free side hustle money made per year, by generation. Baby Boomers earn the most at £5,660.

GenerationAmount made per yearProportion of generation who are side hustlers
Baby Boomer£5,6606.90%
Gen X£2,03014.05%

The average income off the books for men side hustlers is £4,571. Women, on the other hand, earn almost £1,500 less, at £3,091. Men are also the most likely to have a side hustle and not declare it, at 19% compared to 8.3% of women.

Top three regions making the most money tax-free through side hustles

Graph showing the amount of tax free side hustle income per region. London tops the graph with nearly £9000, with the average £4123.

Londoners are the most likely to make tax-free money on the side, with 30.9% of them doing so. They were followed by the North East (26.5%) and the North West (12.4%). As for how much money was being made off the books, Londoners again top the ranks at £8,991.36, followed by East of England at £7,370.82 and the North East at £3,888.60.

What’s the most popular off the books side hustle?

Women are more likely to have cleaning as a side gig at 16.7%, compared to only 13.4% of men. Men, on the other hand, are more than twice as likely to have a driving service side hustle when compared to women (11.9% compared to 4.8%). Overall, the favourite side hustle to not declare taxes on was freelance creative work, at 16.91%. The next was cleaning, at 13.67% followed by giving freelance advice (10.43%).

How Brits are making money on the side

Graph showing which jobs brits are doing to make money on the side. The most popular job is Freelance creative work.

Expert commentary

Brian Palmer

Tax Policy Advisor for the Association of Accounting Technicians (AAT)

Firstly, it is socially irresponsible not to – if you do not pay your taxes government services like the NHS, education, people in need of benefits and services we all need like law and order will not get the money they need. Apart from the moral case, the risks are the same for non-declaration of as any other form of income – you risk a visit from the taxman.

There is a statutory requirement to notify HMRC of any new sources of taxable income by 6 October following the end of the tax year concerned, which can be done through the government’s website. Start off on the right foot by seeking professional advice from a qualified accountant or bookkeeper who will be well placed to offer timely, cost-effective advice.

Being on the end of an in-depth enquiry is something that no one likes – it’s stressful, expensive and has an unpleasant outcome in the shape of penalties and interest on any previously undisclosed income. If a person is a regular offender or fails to make a full and honest disclosure from the outset on enquiry they can face criminal proceedings and even a jail sentence.


This study is from a survey of 2,031 British adults, commissioned by in July 2017, and conducted by research provider, Mortar London. Only regions with 40 or more respondents were included.

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