Trading Allowance
Glossary
Trading Allowance
The trading allowance is a UK £1,000 tax-free allowance against income from self-employment, casual services, or hobby trading — if your total trading income for the year is £1,000 or less, you don't need to declare it or pay tax on it.
If trading income is over £1,000 you can either deduct allowable expenses in the normal way OR claim the £1,000 trading allowance as a flat deduction (whichever is more beneficial). You can't do both. The allowance is per taxpayer, not per trade — if you have two side hustles each earning £600, the combined £1,200 needs reporting and one allowance applies.
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