Trading Allowance
UK tax glossary · Last reviewed: April 2026
The trading allowance of £1,000 per tax year covers income from casual activities such as selling items online, occasional freelancing, or odd jobs. If your gross income from trading is £1,000 or less, you have no tax to pay and no need to register for Self Assessment.
If your income exceeds £1,000, you have a choice: deduct the £1,000 flat allowance from gross income, or deduct actual allowable expenses. Use whichever produces the lower taxable profit.
The allowance applies to each individual separately. It cannot be combined with the £1,000 property allowance to give £2,000 on a single income stream. You cannot use the trading allowance alongside actual expenses — it is one or the other.
Worked example
Gross trading income: £3,500. Actual expenses: £600. Option A: £3,500 − £1,000 allowance = £2,500 taxable. Option B: £3,500 − £600 actual expenses = £2,900 taxable. Choose Option A — £400 lower taxable profit.
Common questions
Does the trading allowance apply to income from a platform like eBay or Etsy?
Yes, if the activity is trading (buying and selling for profit or providing services). Selling unwanted personal possessions is not trading and not taxable at all — the allowance is separate from this distinction.
Can I use the trading allowance if I am also employed?
Yes. The trading allowance applies to each individual's trading income regardless of other income sources. Employment income does not affect eligibility.
Related resources
TaxHelper provides general information based on published HMRC rates and guidance. It is not regulated financial or tax advice. For decisions involving significant sums, complex circumstances, or if you are unsure, speak to a qualified accountant or HMRC directly.