What is the trading allowance?
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What is the trading allowance? In 2026-27 the trading allowance lets you have £1,000 of self-employed income tax free. Earn £1,000 or less and you may not need to tell HMRC; earn more and you can deduct £1,000 instead of your expenses. Usually not. If your gross trading income for the tax year is £1,000 or less, GOV.UK says you may not need to tell HMRC, unless you cannot use the allowance or you want to register, for example to claim relief for a loss. No. You claim one or the other for that income. If you take the £1,000 allowance, you cannot deduct any other expenses or allowances from it. No. It is £1,000 a year in total across all your trades. You get a separate £1,000 property allowance if you also have rental income. Read the full answer, with every source, at rightotax.co.uk.
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Transcript
What is the trading allowance? In 2026-27 the trading allowance lets you have £1,000 of self-employed income tax free. Earn £1,000 or less and you may not need to tell HMRC; earn more and you can deduct £1,000 instead of your expenses. Usually not. If your gross trading income for the tax year is £1,000 or less, GOV.UK says you may not need to tell HMRC, unless you cannot use the allowance or you want to register, for example to claim relief for a loss. Read the full answer, with every source, at rightotax.co.uk.
Voice and visuals made with automated software, including AI.
This is general information to help you understand the rules. It isn't tailored to your circumstances, so check your own position before acting on it.
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