Trading Allowance Calculator
Calculate whether to use the £1,000 trading allowance or actual expenses for your self-employed or gig economy income. See which option saves you more tax.
Total income before expenses
Business costs you can deduct
Eligible Income
- Self-employment / freelancing
- Gig economy (Uber, Deliveroo, etc.)
- Casual services and odd jobs
- Selling handmade goods online
Not Eligible
- • Employment income (PAYE)
- • Partnership income (use partnership rules)
- • Income from employer or connected person
- • Property income (use property allowance)
What is the £1,000 trading allowance?
The trading allowance is a £1,000 tax-free allowance for individuals with trading income from self-employment, casual services, or the gig economy. If your gross trading income is £1,000 or less, you don't need to register for Self Assessment or pay tax on this income.
Can I use both trading and property allowance?
Yes, you can claim both allowances if you have both trading and property income. Each allowance is £1,000, so you could potentially have £2,000 of tax-free income. However, you cannot use the trading allowance against employment income.
When should I use actual expenses instead?
Use actual expenses when they exceed £1,000 and your gross income is above £1,000. For example, if you earn £3,000 with £1,500 expenses, using expenses gives you £1,500 profit vs £2,000 with the trading allowance. You cannot use both - it's one or the other.
Do I need to register for Self Assessment?
If your gross trading income is £1,000 or less, you don't need to register. If it's more than £1,000 but you're using the trading allowance, you must still register and report your income, but you'll only pay tax on the amount over £1,000.
Understanding the Trading Allowance
The £1,000 trading allowance was introduced in April 2017 to simplify tax for people with small amounts of self-employment or gig economy income. It means you can earn up to £1,000 from self-employment tax-free without needing to register for Self Assessment.
Disclaimer: This calculator provides estimates based on HMRC rules. Your actual tax situation may vary. Consult a tax professional for complex situations.
Calculator reviewed by Waqas Sagar, Tax Specialist, updated January 2025.