Taxation logo taxation mission text

Since 1927 the leading authority on tax law, practice and administration

Trading allowance – simplicity with strings

29 January 2024 / Emma Rawson
Issue: 4922 / Categories: Comment & Analysis , income , Online , partnerships , trading , Business
Simplicity with strings

Key points

  • The £1 000 trading allowance introduced in 2017 provided a welcome simplification for many taxpayers but there are complexities to be aware of.
  • The allowance can be claimed in two ways – full relief and partial relief.
  • A taxpayer who claims full or partial relief cannot deduct any business expenses.
  • It is the gross amount of income that needs to be under £1 000 for the allowance to apply.
  • There are a number of exclusions from the trading allowance including income from partnerships or from the individual’s employer.

The £1 000 trading allowance was first introduced in 2017 and has provided a welcome if rather low profile simplification for many taxpayers ever since.

The allowance unexpectedly came back into the spotlight early this year when new reporting requirements for digital platforms were widely (and wrongly) reported as a ‘side hustle tax’ on...

If you or your firm subscribes to, please click the login box below:

If you are not a subscriber but are a registered user or have a free trial, please enter your details in the following boxes:

Alternatively, you can register free of charge to read a limited amount of subscriber content per month.
Once you have registered, you will receive an email directing you back to read this item in full.

Please reach out to customer services at +44 (0) 330 161 1234 or '' for further assistance.

back to top icon