Starting a business or side hustle is a real hassle, but thanks to the HMRC £1000 self-employed trading allowance, you may be able to get a little bit of extra help.

It’s available for part-time freelancers or those running a small business, and might help reduce your paperwork.

What is the self-employed trading allowance from HMRC?

The HMRC self-employed trading allowance means you can make up to £1000 in each tax year without having to pay income tax or national insurance contributions.

Key points:

• If your self-employed income is less than £1000 in a single tax year (6th April – 5th April), it is tax-free, and you do not even need to complete a tax return.
• Got expenses under £1000? Claim the allowance instead.
• If you claim the self-employed trading allowance, you won’t be able to claim business expenses or other self-employment allowances like mileage. Confused? Get in touch if you’re wondering, do I need to do a tax return.

Who can claim the self-employed trading allowance from HMRC?

If you provide casual services such as dog walking for a neighbour, babysitting for a friend, you can claim the HMRC trading allowance. Here is a list:

• Ebay, Vinted or Facebook Marketplace sellers who sell items they no longer need.
• Babysitters or dog walkers who make a bit of extra cash on the side.
• Gardeners
• Construction workers claiming the CIS tax rebate.

Do I need to do a self-assessment tax return to claim the trading allowance?

Example:

• If you have self-employment income under £1000, and have no other reason to submit a tax return (for example, you earn over 100k or have been asked to by HMRC), the good news is you don’t need to do anything.
• You will need to complete a tax return If you’re gross trading income is over £1000.