The trading allowance is a UK tax-free allowance of £1,000 per tax year for income from self-employment, casual work or trading — letting you earn up to that amount without needing to tell HMRC or pay tax on it.
If your gross income from this kind of activity (before any expenses) is £1,000 or less in a tax year, you generally don't need to register as self-employed or report it. Above £1,000, you'd typically need to register for Self Assessment and declare the income, even if your actual taxable profit after expenses is small.
Casual or small self-employment-type income — occasional freelance work, selling items you've made, small side hustles. It applies to gross income, not profit, so it's the total amount earned that counts toward the threshold.
As an alternative to claiming actual business expenses, the trading allowance can also be used as a flat £1,000 deduction against income instead of itemising real costs — useful if your genuine expenses are modest. Our free side income tracker helps you keep clear records. This is general information, not tax advice; check GOV.UK or speak to an accountant for guidance specific to your situation.