The Trading Allowance is a tax-free amount worth £1,000 that most self-employed people can claim.

The Trading Allowance is very simple to use:

• if you earned under £1,000 from self-employment, it’s tax-free – you don’t even need to declare it or file a tax return
• if you earned over £1,000 but your expenses are under £1,000 (for example, you just spend a few quid on transport), you can just claim this flat £1,000 instead – don’t even worry about keeping receipts
• if your expenses are over £1,000 but you lost your receipts, you can still claim this easier £1,000 tax-free allowance.

The only time you can’t claim the Trading Allowance is if you’re not using “cash basis“, but that’s rare – here is a list of all the situations when you can’t claim it.