Kirk Rice Blog

Earning outside PAYE? What to be aware of in the next few yearsWritten on April 2, 2026 by Kirk Rice LLP

Key Points

• Income outside PAYE includes rental income, savings interest, and freelance or side earnings, all of which contribute to your overall tax position.
• Different income streams are combined when determining your tax band, which can affect how much tax you pay across all sources.
• Making Tax Digital will introduce new reporting requirements for self-employed individuals and landlords over the next few years.
• HMRC has increasing access to third-party data, making it more important to ensure income is reported accurately.

What counts as income outside PAYE?

Income outside PAYE is any income that is not taxed at source through an employer’s payroll or pension income

This can include:

• Rental income from property
• Interest from savings or investments
• Freelance or self-employed income
• Income from online platforms or marketplaces
• Dividends from a company

These income types are usually reported through Self Assessment rather than being taxed automatically as they are earned.

If you have more than one source of income, you may need to report it separately and ensure it is included in your overall tax position.

How different income streams are taxed together

Income outside PAYE is not taxed in isolation. It can include sources such as rental profits, savings interest, or dividends, all of which are considered together when determining your overall tax position.

All income sources are combined to determine your total income for the year. This combined figure is used to determine your tax band, which then affects how each part of your income is taxed.

For example, additional income from rental profits or freelance work may push your total income into a higher tax band, even if your salary alone would not.

Even relatively small amounts of additional income can affect your overall tax position.

How reporting requirements are changing (Making Tax Digital)

Making Tax Digital (MTD) for Income Tax Self Assessment is being introduced in stages over the next few years.

It will apply to individuals with:

• Self-employment and/or property income over £50,000 from April 2026
• Over £30,000 from April 2027
• Over £20,000 from April 2028

Under MTD, individuals will be required to keep digital records and submit updates to HMRC more frequently.

If you earn income outside PAYE, you may need to adapt how you keep records and report your income in the coming years.

What HMRC can now see

HMRC has increasing access to information from third-party sources, including online platforms and marketplaces.

In many cases, income earned through these platforms may already be reported to HMRC. This does not necessarily mean tax is due, but it does mean HMRC may have visibility of that income.

As a result, there is greater focus on ensuring income is reported accurately and in line with the relevant rules.

Income that may previously have been overlooked is now more likely to be visible through data shared with HMRC.

What this means for record keeping and compliance

With changes to reporting requirements and increased data visibility, keeping accurate records is becoming more important.

This includes:

• Tracking income from different sources
• Keeping records of expenses where relevant
• Maintaining clear documentation to support any figures reported

Good record keeping can help reduce errors and make reporting more straightforward.

Staying organised throughout the year can help avoid issues when it comes to reporting your income.

How should you approach income planning?

When you earn income outside PAYE, it is important to consider your overall position rather than looking at each income stream separately.

This includes:

• Understanding how different types of income interact
• Being aware of how additional income may affect your tax band
• Considering the timing of income where possible

Taking a joined-up view of your income can help you make more informed decisions.

Planning ahead may help you understand how different income sources affect your overall tax position and avoid unexpected outcomes.

Why Kirk Rice?

Kirk Rice supports individuals and business owners in understanding how tax applies across multiple income streams and how reporting requirements are evolving.

This includes helping you review your income position, understand your obligations, and approach reporting with greater clarity.

If you would like to discuss your situation, contact info@kirkrice.co.uk