Quick answer
The trading allowance gives you £1,000 of tax-free income from self-employment, side jobs or casual sales each year. If your gross trading income is £1,000 or less, you generally do not need to tell HMRC or file a return for it.
Updated October 2026 · Figures based on 2025/26 rates
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How it works
If your gross income is below £1,000, it is fully covered. If it is above, you choose between deducting £1,000 from income or your actual expenses.
When to register
If trading income is over £1,000 you need to register for Self Assessment and report it, even if your profit is small.
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Who cannot use it
You cannot use it on income from a partnership you are in, or from your employer or their connected business.
Choosing the better route
If your real costs are more than £1,000 then claiming expenses gives a lower profit and tax bill.
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Frequently asked questions
Does it apply to selling items I made?
Yes, if you are trading. Selling personal possessions you no longer need generally does not count.
Is it £1,000 per business?
No. It is £1,000 per person across all trading income.
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