The trading allowance, explained
If you buy things to sell on, up to £1,000 of money in from buyers is tax-free this tax year, and you do not need to tell HMRC about it. From 6 April 2027 the allowance rises to £3,000. It counts money in, before your costs, not profit.
What counts
- Money buyers pay you for things you bought or made to sell, before you take off what you paid for them, postage or app fees.
- Other trading income, such as small jobs or services. The allowance is one total for all your trading, on every app, not one allowance for each app.
Money from selling your own clothes and things you have used does not count. Why your own things are generally not taxed.
The amounts
The allowance uses the tax year, which runs from 6 April to 5 April. It does not use the calendar year that the apps count in. Calendar year and tax year compared.
| Tax year | Runs | Allowance |
|---|---|---|
| 2026/27 (this tax year) | 6 April 2026 to 5 April 2027 | £1,000 |
| 2027/28 | 6 April 2027 to 5 April 2028 | £3,000 |
The government confirmed the rise to £3,000 in the Autumn Budget. It applies from 6 April 2027, for the 2027/28 tax year onwards. Until then the £1,000 limit applies. If your money in goes over £1,000 this tax year, you still need to tell HMRC.
If you go over
- Register for Self Assessment by 5 October after the tax year ends. For this tax year, that is by 5 October 2027. Register for Self Assessment on gov.uk.
- Send a tax return for the year.
- On the return, take off either your real costs or the allowance, not both. Choose the one that gives the lower profit.
For example, buyers pay you £1,400 in the tax year and the things cost you £900. With your real costs, your profit is £500. With the allowance, it is £400. Here the allowance gives the lower figure. If your costs are more than the allowance, your real costs usually give the lower figure.
Sources
- Tax-free allowances on property and trading income (gov.uk)
- Increasing the trading allowance (gov.uk policy paper)
- HMRC's guide to buying or making things to sell (gov.uk)
- Register for Self Assessment (gov.uk)
Rules last checked November 2026. This is guidance from HMRC's published rules, not tax advice. If you are unsure, check gov.uk or speak to an accountant.
