Trading allowance
The trading allowance lets you earn £1,000 of self-employed income in a tax year without paying tax on it or, in most cases, telling HMRC. It is measured on turnover, before any expenses.
Correct for the 2026/27 tax year. Last checked 12/09/2026.
You can either take the allowance or claim your real expenses. Not both.
What it means for your money
Above £1,000 of turnover you have to register and file, even if the work made a loss. Below it, and with no other reason to file, you can usually leave it.
For anyone driving seriously the allowance is worse than claiming expenses, because the mileage claim alone passes £1,000 inside about two thousand business miles. It is worth taking only where the work was genuinely occasional.
Where to read more
The trading allowance against claiming expenses does the comparison at three earnings levels.
Sources
Related
The trading allowance against claiming expenses
You can deduct the £1,000 trading allowance from your turnover, or you can deduct your real expenses. Not both. For anyone driving more than a few hours a week the expenses win easily, because the mileage claim alone passes £1,000 inside about two thousand business miles.
HMRC & taxUpdated 27/08/2026
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.
HMRC & taxUpdated 19/08/2026
Turnover
Turnover is everything you earned from the work before a single cost comes off. For a gig driver that is the gross figure on the platform statement, including tips and including the fees the platform took.
HMRC & taxUpdated 27/08/2026
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