Trading & Property Allowances (£1,000 Each)

What Are the Trading & Property Allowances?

Since April 2017, there are two separate £1,000 tax-free allowances:^[1]

• Trading allowance — covers income from self-employment, casual services, and online selling
• Property allowance — covers income from renting out property (or part of it)

Each allowance works independently. You could earn £1,000 from trading and £1,000 from property, all tax-free.

If Your Income Is Under £1,000

If your gross income from trading (or property) is £1,000 or less, it’s completely tax-free. You don’t need to:^[1]

• Register for Self Assessment
• Report it to HMRC
• Keep records (though it’s sensible to)

If Your Income Exceeds £1,000

You have a choice:^[1]

• Option 1: Deduct the £1,000 allowance instead of your actual expenses (useful if expenses are low)
• Option 2: Ignore the allowance and deduct your actual expenses as normal (useful if expenses are high)

You cannot use both — it’s either the £1,000 allowance or actual expenses, not both combined. Whichever you choose, you make the claim when you file your return online.

Who Benefits Most?

The allowances are ideal for people with:^[1]

• Small side hustles — selling on eBay, Etsy, or Vinted
• Casual work — babysitting, gardening, tutoring
• Minor property income — renting a driveway or storage space

Restrictions

You cannot use the trading allowance if the income comes from:^[1]

• Your own employer or a company you control
• A partnership you’re a member of

The property allowance cannot be used alongside the Rent-a-Room Scheme for the same property.

Further Reading

• Side Hustles & Tax
• eBay & Etsy Sellers: Tax Guide
• Rent-a-Room Scheme
• Who Needs to File a Tax Return?