If you’re self-employed, you can get up to £1,000 each tax year as a tax-free allowance: this is called the Trading Allowance.

Basically:

• if you earn less than £1,000 from self-employment, you don’t need to do anything: it’s completely tax-free.
• if your expenses are under £1,000, you can just claim this allowance instead: it’s bigger and you don’t need to worry about receipts.

Very important to remember: if you claim the Trading Allowance, you cannot claim any other self-employment allowance (like mileage, home office, etc.) or expenses.

When can I claim the Trading Allowance?

• when you’re self-employed
• if you’re a construction worker claiming your CIS tax rebate
• if you’re providing casual services: for example, if you’re babysitting or selling a few things on eBay
• or if you’re renting out items, for example power tools.

Landlords have a £1,000 similar property allowance. If you have both types of income, you’ll get a £1,000 allowance for each.

Do I need to submit a Self Assessment tax return to claim it?

• no, if your income from self-employment is under £1,000 and you don’t have another reason to file a tax return
• yes, if you earn more but want to claim this allowance.