FullWorkings UK tax and finance calculators

Trading & property allowance

2026-27

The income

Which allowanceYou get one of each if you have both kinds of income.
Gross incomeEverything received before any costs come off. £
Your expensesWhat you could deduct if you claimed costs instead. £
Your other incomeSalary or pension. It decides the rate this is taxed at. £
Where you liveScotland sets its own Income Tax rates.

What it costs

Tax on this income £0.00 a year
Better method—
Reporting—
The allowance£0.00
Left after tax£0.00

The two methods, side by side

Using the allowance — taxable£0.00
Using the allowance — tax£0.00
Claiming expenses — taxable£0.00
Claiming expenses — tax£0.00
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How this is worked out

The trading and property allowances let you take a small amount of income without tax. ⚠ Each one replaces your expenses rather than adding to them.

⚠ You cannot claim both the allowance and your costs

This is the mistake, and it is an easy one to make because almost every other allowance does stack. Here you deduct the allowance instead of your expenses, so it is worth having only when your costs are smaller than it.

Someone with £3,000 of income and £200 of costs is better off with the allowance. Someone with £3,000 of income and £2,000 of costs is much worse off with it.

⚠ The allowance cannot create a loss

gov.uk is explicit: you can deduct up to the allowance, but not more than your income. Expenses can exceed income and give a loss you carry forward; the allowance simply stops at nil. For a business in its first year that is often the deciding factor, and it is rarely mentioned.

Full relief and reporting

If gross income is at or below the allowance, none of it is taxed — and for property income there is nothing to tell HMRC at all. For trading income there are circumstances where you still have to register, so "nothing to pay" and "nothing to report" are not quite the same claim.

Either way, keep the records. Full relief is not an exemption from being able to show the figures.

One of each

If you have both trading and property income you get an allowance for each, and you can use the allowance for one and claim expenses on the other. This page works out one at a time.

What this does not cover

Partnership income, which cannot use the trading allowance. Income from your own company or from an employer, or from a partnership you are a member of — all excluded. Rent a Room income, which has its own and larger threshold and cannot be combined with the property allowance for the same letting — see the Rent a Room calculator. Capital allowances on equipment, which the allowance also replaces. And National Insurance, which follows profit rather than this choice.

Where these figures come from

Every figure above is read from a dated rate file rather than written into the page, and each one is checked against the gov.uk page it came from. How these numbers are kept right sets out the whole process.

Self-employed tax calculator