What is the £1,000 trading allowance?
£1,000 of self-employed income you can earn tax-free without registering - but for most delivery drivers claiming expenses is worth far more.
Last checked 12/09/2026.
The trading allowance lets you earn up to £1,000 a year from self-employment without paying tax on it or, generally, needing to register. It is measured on income before expenses.
It is genuinely useful if you drove for a few weekends and took £600. Below the threshold there is nothing to register and nothing to file.
Above it, you choose: claim the trading allowance instead of your expenses, or claim your actual expenses. You cannot do both.
For a delivery driver that choice is usually easy. A driver taking £8,000 with 6,000 business miles has a mileage allowance of £3,300 - more than three times the trading allowance. Claiming expenses wins by a distance for anyone doing meaningful mileage. Tax-free allowances on trading income (opens in a new tab).
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