Overview of the £1,000 trading allowance

A trading allowance for individuals of £1,000 each was introduced from 2017–18 (ITTOIA 2005, Part 6A, Ch. 1).

This means that:

individuals with trading income of £1,000 or less in a tax year do not need to declare or pay tax on that income; and

individuals with trading income of more than £1,000 can elect to calculate their profits by deducting the allowance from their income, instead of the actual allowable expenses.

The trading allowance also applies to certain miscellaneous income from providing assets or services.

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