UK Calculator

Trading Allowance Calculator UK 2025/26

Calculate whether your sole trader or side hustle income falls within the £1,000 trading allowance. See instantly whether you owe tax and whether to claim the allowance or actual expenses.

Trading Allowance Calculator 2025/26

Trading Allowance — Key Facts 2025/26

The £1,000 trading allowance was introduced in April 2017. It covers trading income, casual income, and income from providing goods or services on a self-employed basis. It is designed to simplify tax for people with small amounts of self-employment income, casual work, or side hustle earnings.

Trading Allowance Quick Reference

ScenarioWhat to Do
Gross income ≤ £1,000No tax due. No Self Assessment registration required.
Gross income > £1,000, expenses < £1,000Use trading allowance. Taxable profit = gross − £1,000.
Gross income > £1,000, expenses > £1,000Use actual expenses. Taxable profit = gross − actual expenses.
Profit below personal allowance (£12,570)No income tax due (but must still file Self Assessment if registered).
Also have rental incomeClaim separate £1,000 property allowance against rental income.

Frequently Asked Questions — Trading Allowance

What is the UK trading allowance?
The trading allowance is a £1,000 tax-free threshold for trading and miscellaneous income. If your gross self-employment income is £1,000 or less, no income tax or NIC is due and you do not need to register for Self Assessment.
Does the allowance apply to gross income or profit?
The allowance is compared against gross income (turnover), not profit. If gross receipts are below £1,000, no tax is due. If above, you choose between the £1,000 deduction or actual expenses — whichever is greater.
Can I claim both the trading allowance and actual expenses?
No — you must choose one or the other. If actual expenses exceed £1,000, claiming them saves you more tax.
Does the trading allowance cover rental income?
No — a separate £1,000 property allowance applies to rental income. You can claim both allowances in the same year if you have both types of income.
Do I need to register for Self Assessment if under £1,000?
Generally no — if gross trading income is £1,000 or less you are not required to register and there is no tax to pay. Unless HMRC has asked you to file.
What types of income does it cover?
Self-employment, freelancing, selling goods online, casual work, and other miscellaneous income. Not rental income, savings interest, or dividends.
Does it apply to eBay, Etsy, or Vinted income?
Yes — income from selling goods on platforms counts as trading income. Selling personal items you no longer want is generally not taxable unless you are regularly trading.
Can I use it if I also have PAYE employment?
Yes — the trading allowance applies to your self-employment income regardless of whether you also have PAYE employment. Income sources are assessed separately.
What if I earn just over £1,000?
You must register for Self Assessment. You then choose between deducting £1,000 or actual expenses — whichever reduces your taxable profit more.
Does NIC apply once I exceed the trading allowance?
Class 4 NIC at 6% applies on profits between £12,570 and £50,270 if your profits exceed the Small Profits Threshold (£6,725). Class 2 NIC effectively abolished from 6 April 2024.
Can two people in the same household each claim it?
Yes — the trading allowance is individual. Each person can claim up to £1,000 against their own trading income.
Is the trading allowance the same as the personal allowance?
No — they are separate reliefs. The personal allowance (£12,570 for 2025/26) reduces overall taxable income. The trading allowance is a specific relief against trading/miscellaneous income only.