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Tax

UK Trading Allowance Calculator (2025/26)

The £1,000 trading allowance is HMRC's tax-free threshold for casual self-employed income. This calculator shows whether you owe tax, whether you need to register for Self Assessment, and which is better for you — claiming the allowance or claiming actual expenses.

Last verified: 25 April 2026 Source: GOV.UK trading allowance guidance Next review: 25 October 2026
Inputs
All your trading or casual income for the tax year — gross, before any costs are deducted.
Materials, fees, postage, equipment, mileage, etc. Only fill this in if you've kept records — leave at 0 to skip.
Scotland uses different income tax bands. Affects the tax owed if you're over the threshold.
Best method for you —
Taxable profit —
Estimated tax due —
Need to register for Self Assessment? —
May trigger platform-to-HMRC reporting? —
Vinted seller — £800 of personal items, no expenses claimed
Gross income £800 · Expenses £0 · Rest of UK

Under the £1,000 trading allowance — no tax due, no Self Assessment registration needed. But: if you sold over 30 items or your total platform sales were above £1,700, Vinted will still pass your details to HMRC for cross-checking.

Etsy seller — £4,500 turnover, £600 of materials
Gross income £4,500 · Expenses £600 · Rest of UK

Above the £1,000 threshold, so Self Assessment is required. The £1,000 trading allowance saves more tax than the £600 of actual expenses, so the allowance method wins. Taxable profit £3,500. At basic rate (20% income tax + 6% Class 4 NI on profits above the personal allowance, depending on other income) the tax owed depends on your total income.

DistroKid artist — £200 of streaming royalties
Gross income £200 · Expenses £0 · Rest of UK

Well under £1,000 — tax-free under the trading allowance. No Self Assessment registration needed. DistroKid won’t report you to HMRC unless you earn above £1,700 or hit 30+ transactions in the year.

The £1,000 trading allowance is one of the most useful tax reliefs HMRC offers — and one of the most misunderstood. It’s specifically designed for people with small amounts of self-employed or casual income who don’t want the admin overhead of a full Self Assessment return.

How it works

If your gross trading income for the tax year is £1,000 or less, you don’t pay any tax on it, and you don’t need to register for Self Assessment. You don’t even need to tell HMRC about it. The threshold is checked against your turnover (income before expenses), not your profit.

If your gross income is over £1,000, you have a choice:

  • Claim the £1,000 trading allowance. Subtract £1,000 from your gross income, and pay tax on whatever’s left. No need to track expenses.
  • Claim your actual expenses. Subtract real costs (materials, postage, platform fees, mileage at 45p per mile, equipment, etc.) and pay tax on the profit.

You pick whichever gives you a lower taxable amount. You can’t use both methods in the same tax year.

When you must register for Self Assessment

If your gross side income exceeds £1,000, you must register for Self Assessment by 5 October following the tax year end. The tax year runs 6 April to 5 April. So if you crossed £1,000 between April 2025 and April 2026, your registration deadline was 5 October 2026, and your tax return is due by 31 January 2027.

There is a separate £1,000 property allowance for rental income, with the same structure. You can claim both in the same year if you have both types of income.

Why this is different from the HMRC reporting threshold

HMRC introduced new platform reporting rules in January 2024. Online platforms (Vinted, eBay, Etsy, Depop, Airbnb, Uber, Fiverr and others) must collect your details and report your sales to HMRC if you exceed 30 items sold or £1,700 in sales in a calendar year.

This is a reporting threshold, not a tax threshold. They’re different numbers, different triggers, and they operate independently.

You can be reported to HMRC (because you cleared out 40 items of clothing) without owing any tax (because you sold them at a loss compared to what you originally paid). And you can owe tax (because you crossed the £1,000 trading allowance) without being reported by any platform (because you didn’t hit 30 items or £1,700).

For the full breakdown, see the HMRC platform reporting checker.

What counts as “trading income”

HMRC uses the badges of trade to decide whether activity counts as a business. The main markers:

  • Are you doing it with a view to making a profit?
  • Are you buying things specifically to resell, rather than disposing of personal possessions?
  • Is the activity organised, regular, and substantial?
  • How long do you own things before selling them?

Selling your own old clothes, CDs, books, or furniture at a loss isn’t trading — that’s disposing of personal property and is generally not taxable, regardless of how much money you make in total. Buying stock to resell at a profit is trading. The line between the two is sometimes blurry, and the calculator above can’t make that judgement for you.

If you’re unsure, the safest approach is to keep records anyway. HMRC’s online guidance on this is the canonical source.

Common mistakes
  • Confusing the trading allowance (£1,000 tax-free for casual self-employed income) with the personal allowance (£12,570 tax-free across all income). They’re separate reliefs — you can use both.
  • Mixing up turnover and profit. The £1,000 trading allowance applies to gross income before expenses, not profit. If your turnover is £900 and your expenses are £400, you’re still under the threshold — no tax, no registration.
  • Assuming HMRC won’t find out. Since January 2024, online platforms (Vinted, eBay, Etsy, Depop, Airbnb, Uber and others) have been required to report sellers to HMRC if they sell more than 30 items or earn more than £1,700 in a year. The reporting threshold is separate from the tax threshold.
  • Choosing the trading allowance when actual expenses would save you more. If your expenses are over £1,000, claim them instead — you can’t use both methods.
  • Forgetting Class 2 NI was abolished from 6 April 2024. You no longer pay it. Class 4 NI (6% / 2%) still applies on profits above the personal allowance.
What this calculator doesn't cover
  • Estimates only. This calculator does not factor in your day-job (PAYE) income, dividends, savings interest, or other tax bands you may already be sitting in. For combined income tax, use the side hustle tax calculator.
  • Does not handle property income — that has a separate £1,000 property allowance with the same structure.
  • Does not factor in Marriage Allowance, Blind Person’s Allowance, or other reliefs.
  • Tax owed is a basic-rate estimate only. If your total income pushes you into higher (40%) or additional (45%) rates, you’ll owe more. Use the multi-platform tax aggregator for full marginal-rate maths.

Frequently asked questions

Do I need to tell HMRC about side income under £1,000?

No. If your gross trading income for the tax year is £1,000 or less, you owe no tax, you don’t need to register for Self Assessment, and you don’t need to tell HMRC. This is the entire point of the trading allowance.

What's the difference between the trading allowance and the personal allowance?

They’re separate reliefs. The personal allowance is £12,570 of tax-free income across all sources (employment, self-employment, dividends, etc.) — it’s your standard tax-free amount. The trading allowance is an additional £1,000 specifically for casual self-employed or trading income. You can use both.

If I have a normal job, can I still use the trading allowance?

Yes. The trading allowance is independent of your PAYE employment. Your day-job income and personal allowance are unaffected. The £1,000 covers your side income only.

Do platforms like Vinted and eBay report me to HMRC under £1,000?

Possibly. The HMRC reporting threshold is separate from the tax threshold. Platforms must report you if you sell more than 30 items OR earn more than £1,700 in a calendar year. So you can be reported (because you sold a lot of personal stuff) without owing any tax. See the HMRC platform reporting checker for details.

If I'm over £1,000, should I claim the allowance or claim my actual expenses?

Whichever is bigger. You can’t use both — pick one. If your real costs (materials, postage, fees, etc.) are above £1,000, claim them. If they’re below, claim the £1,000 trading allowance and skip the receipt-keeping. The calculator above tells you which is better for the numbers you entered.

Is the trading allowance changing?

The trading allowance itself stays at £1,000 for now. From around 2029, the Self Assessment registration threshold is expected to rise to £3,000 — meaning you’ll still owe tax above £1,000 but won’t need a full Self Assessment return until £3,000. This change has been announced but is not yet in force. The trading allowance amount is unchanged.

Does it apply to crypto, OnlyFans, Twitch, dog walking — or only to obvious 'businesses'?

It applies to all trading income — anything where you’re providing goods or services for money on a self-employed basis. Crypto trading, content creation, freelance work, casual gigs, online sales — all count. The activity matters less than the pattern: are you doing it regularly, with intent to make money? If yes, it’s trading income, and the allowance applies.

About this calculator. Maintained by Jordan — a UK seller and creator who actually uses these platforms (Etsy, eBay, Vinted, DistroKid). Built to be accurate, mobile-fast, and honest about its limits. Spot a bug? Email hello@payoutmath.co.uk.