Guides › £1,000 Trading Allowance: Side Income and Self Assessment
£1,000 Trading Allowance: Side Income and Self Assessment
General information, not tax advice. We are not HMRC and are not affiliated with it. Check GOV.UK. Last checked against GOV.UK: 17 October 2026. Anything marked expected should be re-checked. Examples use made-up figures. This page contains no affiliate links. Never enter your UTR, National Insurance number or other identifiers on this site.
Short answer: GOV.UK says you can get up to £1,000 each tax year in tax-free allowances for trading income (and £1,000 for property income). If your annual gross trading income is £1,000 or less, you may not have to tell HMRC, unless you cannot use the allowance or you must register for Self Assessment for another reason. If it is more than £1,000, you must register for Self Assessment, by 5 October in the following tax year (for 2026-27 income, that is 5 October 2027, Tuesday).
What counts
Trading income includes self-employment, casual services (for example babysitting or gardening) and hiring out personal equipment. The allowance doesn't apply to trading income from a partnership.
Using the allowance above £1,000
If your gross trading income is above £1,000 you can deduct up to £1,000 (but not more than your income) instead of actual expenses. It may be better to claim expenses if they exceed the income (GOV.UK). You can't deduct other expenses if you claim the allowance.
Other income
GOV.UK lists: other gross income over £1,000 up to £2,500: contact HMRC; other income over £2,500: register for Self Assessment.
When you must register anyway
Even with income at or under £1,000: if you've made a loss and want relief, want to pay voluntary Class 2 National Insurance, want Tax-Free Childcare based on your self-employment income, or want Maternity Allowance based on it.
When you can't use it
Income from a company you (or someone connected) own or control, a partnership where you or someone connected is a partner, or your employer (or your spouse's or civil partner's employer).
Records to keep
Invoices, income spreadsheets, emails confirming income, payer statements, bank statements, pay-in records or a diary of income by customer. HMRC can charge a penalty if records aren't accurate, complete and readable or aren't kept for the required period.
Benefits and charges
Using the allowance reduces your income for tax credits, the high income child benefit charge, student loan repayment and married couple's allowance calculations. Universal Credit income is not affected.
Related
Do I need to file? · Registered after 5 October
FAQ
I earned £800 selling crafts. Do I register? Under the GOV.UK page, possibly not; check the exceptions above.
Does this cover VAT? Not covered.
What we could not verify
- The page was last updated in 2019 and contains "2018 to 2019" wording; the £1,000 and £2,500 figures are as published and not re-confirmed for 2026-27 on another GOV.UK page.
- The 5 October 2027 date applies the stated rule to 2026-27 income (our application).
- National Insurance and VAT thresholds.
Sources (official)
- GOV.UK (HMRC), Tax-free allowances on property and trading income (published 7 April 2017, last updated 8 May 2019) — https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income (read 17 October 2026)
Deadlines calendar → Penalty estimator →
Not tax advice. See the disclosure.