A bit of extra income can make a real difference. It might help you build an emergency fund, clear a card balance or just give the monthly budget some breathing room. You do not need a business plan to get started. Many of the simplest ideas use things you already have: spare stuff, spare space or a skill people will pay for.
Below we look at the most practical options, then at the tax rules, which are simpler than many people expect for small amounts.
Sell the things you no longer use
Most homes have money sitting in cupboards. Clothes that no longer fit, children's toys and equipment, gadgets, furniture and books can all find a buyer online or at a car boot sale.
- Take clear photos in daylight and describe any wear honestly.
- Look up what similar items have actually sold for, not just the asking prices.
- Bundle small items together so they are worth the postage.
- For bulky items, offer collection only and ask for payment on pick-up.
Selling your own unwanted things is usually not taxable, however many items you sell. Online marketplaces now have to collect details of sellers who make 30 or more sales, or receive about £1,700 or more in a calendar year, and report them to HMRC by the following January. That reporting does not mean you owe tax. It simply helps HMRC spot people who are trading.
Rent out a spare room or your driveway
If you have space you do not use, someone may pay for it.
A spare room. Taking in a lodger can bring in a regular sum each month. Under the government's Rent a Room Scheme, you can earn up to £7,500 a year tax-free from letting furnished accommodation in your own home. The limit halves to £3,750 if you share the income with someone else.
A driveway or garage. If you live near a station, stadium, hospital or town centre, people may pay to park on your drive. Garages and sheds can also be rented out for storage.
Before you do either, check your tenancy agreement or tell your mortgage lender, and let your home insurer know. Some policies and agreements do not allow it without permission.
Turn a skill into paid work
Freelancing covers almost anything people will pay for in their spare time. Common examples include:
- dog walking, pet sitting and house sitting
- gardening, cleaning and odd jobs
- tutoring or music lessons
- writing, design, bookkeeping or admin work done online
- making and selling crafts or baking
If you are employed, check your contract to make sure a second job is allowed. And be cautious with any opportunity that asks you to pay a fee upfront to start earning. Our guide to spotting financial scams explains the warning signs.
How tax works on extra income
Here are the main rules for the 2026 to 2027 tax year, which runs from 6 April 2026 to 5 April 2027.
- The trading allowance. You can earn up to £1,000 a year from self-employment, casual work such as babysitting or gardening, or hiring out your own equipment without paying tax on it. If your total income from these is £1,000 or less, you usually do not need to tell HMRC.
- The property allowance. A separate £1,000 allowance covers income from land or property, such as renting out a driveway. It cannot be used on income you already get tax-free under the Rent a Room Scheme.
- Going over £1,000. The allowance is based on what you take in before costs, not your profit. Once you go over it, you need to register for Self Assessment by 5 October after the end of the tax year. You can then either deduct the £1,000 allowance or claim your actual expenses, whichever is better.
GOV.UK has full details of the trading and property allowances, including some situations where you must register even below £1,000.
Make your extra money count
Extra income is easiest to spend without noticing. Decide what it is for before it arrives. Paying it straight into a separate account keeps it apart from day-to-day spending, and our guide to savings accounts explained explains the main types of account. If you get Universal Credit or other benefits, report your earnings, as they can affect what you receive. Some money apps can also help you track what comes in from each source.
This article is general information, not financial advice. For free, impartial help with your own situation, visit MoneyHelper.
