Posted on Jul 2, 2021

  Brits are making almost £5k extra a year (£411 per month) from ‘side businesses’, a new survey by 118 118 Money has revealed.

  

  Almost 68% of employed UK adults currently have a secondary source of income, in addition to their main job.

  Nearly a third (31%) started their ‘hobby business’ activity in 2020, and close to one in five (17%) started after the first lockdown specifically, between July 2020 and December 2020. A further 18% have started generating additional income from a side business in the first half of 2021.

  The data shows podcasting is the most profitable secondary source of income overall, paying Brits who have taken this on an average of £954 extra a month. This is followed by selling handmade candles (£670) and renting out a flat or space (£657).

  10 most profitable secondary sources of income

  ActivityAverage profit a monthPodcasting£954 a monthSelling handmade candles£670 a monthRenting out a flat/space£657 a monthBlogging£646 a monthSelling soft furnishing£616 a monthSelling handmade clothing/accessories£528 a monthSelling handmade soaps£525 a monthWriting e-books£517 a monthSelling handmade food/drink products£485 a monthInvesting£451 a month

  Selling handmade items is the most popular ‘hobby business’ amongst Brits, with six in ten (59%) of those with a side business choosing this as their preferred way of generating extra cash. Other popular activities, according to the data, are investing (20%) and selling antiques or collectibles (12%).

  Amongst handmade items, candles and soaps seem to be extremely popular online as well, with Etsy data showing 6,226 and 3,122 listings for these categories respectively.

  PR Strategist and Recruitment Consultant Alex Hickson, 25, and his business partner Oliver Burr, 33, from Wakefield, started their online business ‘Flaming Crap’ after the first lockdown, turning Oliver’s candle-making hobby into extra cash. Their pop-culture inspired candle brand makes them around £2,000 extra a month on average.

  Hobby businesses more popular with women, but men make more money

  It appears more women have started a ‘side business’ recently, with 56% taking one on between 2020 and 2021, compared to 42% of men.

  However, the data shows men are typically earning more than women from their secondary source of income. On average, men make around £427 a month, vs the £392 their female counterparts earn. That’s £35 more per month, and £420 extra per year.

  Gen Zers earn the most from their side businesses

  Millennials are the most invested generation when it comes to figuring out ways to make extra cash: over three quarters (78%) of those aged 25-34 said they have a secondary source of income in addition to their main job.

  However, those aged 18-24 seem to be earning the most, with their extra income standing at £546 a month on average. That’s over £100 more a month than the UK average, which stands at £411, and almost £2k extra than the UK annual total a year.

  Be Aware of Rules and Regulations

  When thinking about setting up a side business, potential business owners should make sure they do their research to understand the legal and tax implications of doing so. Here are some of the rules and regulations to be considered:

  If you’re running a business from home, you may require permission from your landlord, mortgage provider, local planning officer or your local Council.

  If you sell goods or services to make a profit regularly, including handmade items, you may need to register as a Sole Trader with HMRC.

  If your annual trading income is £1,000 or less, from one or more trades, you may not have to tell HMRC, however there are circumstances when you must register for Self Assessment and declare your income on a tax return.

  If you are making over £85,000 per year from a secondary source of income, then you may need to pay other taxes such as VAT too, which could require VAT registration.

  You should always contact HMRC for advice if aren’t sure what you need to do.

  If your activity includes handling food, you should carry out a risk-assessment following HACCP procedures and acquire food hygiene training.

  For further information on ways to make money from home, please visit:?https://www.118118money.com/blog/how-to-make-money-from-home/.?