Trading Allowance Calculator
Do I need to pay tax on my side hustle? Check if your self-employed income is within the £1,000 trading allowance or calculate your tax bill.
Enter your income to see your tax calculation
We'll show you whether you need to pay tax and how much
What is the trading allowance UK?
The trading allowance is a £1,000 tax-free allowance for self-employed income in the UK. If your total trading income is £1,000 or less, you don't need to report it to HMRC or pay any tax. If your income is higher, you can choose to either deduct the £1,000 trading allowance from your income, or deduct your actual business expenses - whichever gives you a lower tax bill.
Do I need to register as self-employed if I earn under £1,000?
No. If your total self-employed income (not profit) is £1,000 or less in a tax year, you don't need to tell HMRC or register for Self Assessment. This applies to casual sellers on platforms like eBay, Vinted, Etsy, as well as side hustles and freelance work.
Should I use the trading allowance or claim expenses?
You should use whichever method gives you the bigger deduction. If your actual business expenses are more than £1,000, claim your expenses. If your expenses are less than £1,000, use the trading allowance. You cannot use both. Our calculator automatically shows you which option saves you more tax.
Does selling personal items count as trading income?
Generally, selling your own used personal possessions is not trading and is not taxable (though Capital Gains Tax may apply for valuable items over £6,000). However, if you regularly buy items to resell for profit, or sell items you've made, this is trading income and the trading allowance rules apply.
What about HMRC's new platform reporting rules?
From January 2024, online platforms like eBay, Vinted, Depop, and Etsy must report seller information to HMRC if you make 30+ sales or €2,000+ in a year. This doesn't automatically mean you owe tax - it just means HMRC will have this information. You still only pay tax if your trading profit exceeds the trading allowance.