About the UK Trading & Property Allowance Calculator
This calculator helps you decide whether to use the £1,000 trading allowance or property allowance, or to deduct your actual expenses instead, for the 2026/27 tax year. Enter your gross side income, what it cost you to earn it and your other taxable income, and it compares the taxable profit, income tax and (for trading) Class 4 National Insurance under each method.
The two allowances are separate: you can have up to £1,000 of trading income (selling goods or services, freelance gigs, online selling as a trade) and up to £1,000 of property income (renting a parking space, a room not covered by Rent a Room, a property) tax-free each year. If your gross income is £1,000 or less you normally do not need to tell HMRC at all. Above £1,000 you can deduct the £1,000 allowance instead of expenses — useful when your real costs are small.
You cannot use the allowances for income from your own or a connected company or partnership, or from your employer or your spouse’s employer, and the property allowance cannot be combined with Rent a Room relief or mortgage-interest relief. Tax uses England, Wales and Northern Ireland bands (personal allowance £12,570, 20%, 40% and 45%); Scottish taxpayers pay different income tax rates.
With the default inputs, the tax & ni saved by the better method is £120.00. Change any value above to recalculate instantly.
How to use the uk trading & property allowance calculator
- 1Choose trading or property income.
- 2Enter your gross income for the tax year before any costs.
- 3Enter the allowable expenses you could claim.
- 4Enter your other taxable income such as salary or pension.
- 5Use the better method shown and report it on your Self Assessment return if income is over £1,000.
Formula and method
Under the expenses method your taxable profit is gross income minus allowable expenses; under the allowance method it is gross income minus £1,000 (never below zero). You must choose one or the other — you cannot deduct both — and the lower profit usually wins. If gross income is £1,000 or less, full relief applies automatically.
The extra income tax is the difference between tax on your other income plus the profit and tax on your other income alone, using the 2026/27 personal allowance of £12,570 (tapered above £100,000), 20% on the next £37,700, 40% up to £125,140 and 45% above. Trading profit also attracts Class 4 NI at 6% between £12,570 and £50,270 of profit and 2% above; property income does not.
- Income
- Gross trading or property receipts for the tax year
- Expenses
- Allowable costs of earning that income
- Other
- Salary, pension and other non-savings income
Worked examples
£3,000 of side-gig income, £400 expenses, £30k salary
Actual expenses leave £2,600 of profit, while the allowance leaves £2,000. At the 20% basic rate that is £520 versus £400 of tax, so the allowance saves £120. Profits are below £12,570, so there is no Class 4 NI.
Higher-rate taxpayer renting a parking space for £2,400
With £60,000 of salary the rent is taxed at 40%. Deducting £100 of costs leaves £2,300 (tax £920); the £1,000 property allowance leaves £1,400 (tax £560), saving £360.
Freelancer with £20,000 income and £6,000 expenses
With no other income, expenses leave £14,000 of profit: income tax 20% × £1,430 = £286 plus Class 4 NI 6% × £1,430 = £85.80. The allowance would leave £19,000 of profit and £1,671.80 of tax and NI (£1,286 + £385.80), so claiming expenses saves £1,300.
Frequently asked questions
What is the trading allowance?+
The trading allowance lets individuals earn up to £1,000 a year of gross trading income — for example from selling goods, casual services or online gigs — tax-free. If your gross trading income is above £1,000 you can deduct £1,000 instead of your actual expenses.
Do I need to tell HMRC about income under £1,000?+
Normally no. If your gross trading or property income for the tax year is £1,000 or less and you can use the allowance, you do not need to register or report it. You might still choose to register, for example to claim a loss or pay voluntary Class 2 NI.
Can I claim both the trading and property allowances?+
Yes. They are separate allowances, so you can have up to £1,000 of trading income and up to £1,000 of property income tax-free in the same year. You cannot, however, use either allowance together with actual expenses for the same income.
Who cannot use the trading or property allowance?+
You cannot use them for income from a company you or a connected person owns or controls, a partnership you or a connected person belong to, or your employer or your spouse’s or civil partner’s employer. The property allowance also cannot be used with Rent a Room relief or finance-cost relief on residential property.
Is the trading allowance per business or per person?+
It is per person, not per business. If you have several trades, the £1,000 allowance covers your total gross trading income across all of them, so you either use it against the combined income or claim expenses.
Tax results are estimates based on published rules and simplified assumptions. They are not tax advice — check official guidance or a tax professional for your situation.