Trading Allowance Calculator UK
Compare the £1,000 allowance with your actual allowable expenses and use the option that produces the lower taxable profit.
Lower taxable profit
£2,000.00Claim the £1,000 trading allowance
Estimated Income Tax
£400.00At your 20% marginal rate
Saving vs other method
£120.00Income Tax only; NI not included
Using the allowance
£2,000.00
Using actual expenses
£2,600.00
Gross income is the threshold test
HMRC tests the £1,000 threshold against receipts before expenses. Keep income records even when full relief means you do not need to report the income.
Frequently asked questions
What is the trading allowance?
It is an exemption of up to £1,000 a year for eligible gross income from self-employment, casual services and hiring personal equipment.
Can I claim the trading allowance and expenses?
No. For partial relief, you choose either the trading allowance or actual allowable expenses. You cannot deduct both against the same trading income.
Do I need Self Assessment if I earn more than £1,000?
Gross trading income over £1,000 normally means you must register for Self Assessment, even if expenses reduce the taxable profit below £1,000.
When is the trading allowance unavailable?
It does not apply to partnership income, or to certain income from your employer or a company or partnership connected with you. Other exceptions can apply, so check the official HMRC guidance.
Official source
HMRC — Tax-free allowances on property and trading incomeRelated Calculators
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