What is the trading allowance for 2026/27?

Full answer

The **trading allowance** is a £1,000 tax exemption for individuals with small amounts of self-employment or casual trading income. It was introduced in April 2017 and applies to all tax years since then, including 2026/27. **Key rules:** - If your gross trading income (before any expenses) is **£1,000 or less**, you have no tax or NI liability and no obligation to notify HMRC or file a tax return. - If your gross income is **above £1,000**, you must register for Self Assessment and declare the income. You then choose between: 1. **Claiming the £1,000 trading allowance** as a flat deduction (profit = income − £1,000) 2. **Claiming actual allowable expenses** — whichever gives a lower taxable profit **Partial relief above £1,000:** You can claim partial relief if your expenses are less than £1,000 — the allowance brings your taxable profit to income minus £1,000 even if actual expenses are lower. **Cannot claim both:** You cannot claim the trading allowance AND deduct actual business expenses in the same tax year for the same trade. **Property income allowance — separate £1,000:** There is also a **property income allowance** of £1,000 for rental income, entirely separate from the trading allowance. You can benefit from both in the same year (e.g. £800 trading + £800 property income — both exempt). **Gig economy and online selling examples:** The trading allowance covers Uber Eats / Deliveroo courier income, eBay or Vinted reselling (genuine trading), tutoring, and other casual self-employment. Note: selling personal possessions at a loss is not trading and always exempt regardless. **Registration trigger:** If trading income exceeds £1,000 you should register by **5 October** following the end of the tax year in which your income first exceeded the threshold.

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