Trading Allowance Calculator
Compare the £1,000 trading allowance with your actual costs of selling for the same income, and see which gives the smaller profit figure.
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The UK trading allowance is £1,000 per tax year: above that, GOV.UK says you can deduct either the allowance or your actual expenses from your gross trading income, but not both for the same income. This calculator puts the two options side by side so you can see which deduction is larger and what profit figure each leaves.
Enter your gross trading income for the tax year and your allowable expenses for the same year. The table shows one row for the allowance and one for actual expenses, and the line below names the larger deduction. Above the form, two short lines keep the platform reporting test (30 or more sales, or more than about £1,700) apart from the tax question, since they are different numbers. The calculator stops at the profit figure: Income Tax depends on your other income, so it is not worked out here.
How to use the trading allowance calculator
You need two figures for one tax year, which runs from 6 April to 5 April. Marketplaces often show calendar-year totals, so add up your sales from 6 April to 5 April first.
- Enter your total sales before any costs in “Gross trading income for the tax year (£)”.
- Enter your costs in “Allowable expenses for the same year (£)”. The hint under the box lists what the items cost you, postage, packaging, fees and other costs of selling.
- Read the table. The “Trading allowance (up to £1,000)” row and the “Actual expenses” row each show a “Deduction” and a “Profit that counts”.
- Read the line “The larger deduction is”, which names the option that takes more off your income.
- If your gross is £1,000 or less, a note appears above the table: GOV.UK says you may not need to tell HMRC, with exceptions such as wanting to claim a loss.
- Change either figure to try another year or a different expense total; the table updates as you type.
Both figures are kept in the page address, so copying the link from the address bar reopens the same comparison. When the two deductions are equal the calculator names the allowance, and either choice leaves the same profit figure.
How does the trading allowance work?
You compare the £1,000 trading allowance with your actual allowable expenses and deduct one of them from your gross trading income for the tax year. GOV.UK calls deducting the allowance “partial relief”. The profit left is what goes forward; the calculator shows it for both options.
Three cases, run through the calculator:
| Gross income | Actual expenses | Profit with allowance | Profit with actual expenses | Larger deduction |
|---|---|---|---|---|
| £3,000 | £400 | £2,000.00 | £2,600.00 | Trading allowance |
| £3,000 | £1,800 | £2,000.00 | £1,200.00 | Actual expenses |
| £800 | £100 | £0.00 | £700.00 | Trading allowance |
The allowance never takes off more than your income, so at £800 gross it deducts £800, not £1,000. Resellers who buy stock to sell on can easily pass £1,000 of expenses, since the expenses box includes what the items cost you, and then the actual expenses row wins.
What if my trading income is £1,000 or less?
GOV.UK says that with gross trading income of £1,000 or less you may not have to tell HMRC, with exceptions such as wanting to claim a loss. The calculator shows that note above the table. In this range the allowance deduction equals your whole income, so its profit row reads £0.00, as in the £800 case.
Can I claim both the trading allowance and actual expenses?
No, not for the same income. GOV.UK says that above £1,000 of gross trading income you either deduct the £1,000 allowance or claim your actual expenses. That is why the calculator gives each option its own row instead of adding them together.
Does selling on Vinted or eBay count as trading?
It depends on what you sell. GOV.UK says selling your own personal possessions, such as clothes, furniture or phones, is probably not trading, while buying or making things to sell at a profit probably is, even as a hobby. Only trading income goes into this calculator.
Platform reporting is a separate test: a marketplace reports you to HMRC after 30 or more sales or more than 2,000 euros, and GOV.UK says that does not automatically mean you owe tax.
How this tool works and where the numbers come from
GOV.UK says gross trading income of £1,000 or less in a tax year may not need to be reported, and that above it you can deduct either the £1,000 allowance or your actual allowable expenses, not both for the same income. The calculator subtracts each option from your gross income and shows which deduction is larger. It does not work out Income Tax, which depends on your other income.
Sources
- GOV.UK: tax-free allowances on property and trading income (updated 2019-05-08) · checked
- GOV.UK: check if you need to tell HMRC about your income from online platforms (updated 2025-02-13) · checked
- GOV.UK: selling goods or services on a digital platform (updated 2025-09-22) · checked
Frequently asked questions
What is the trading allowance?
A £1,000 allowance for each tax year, 6 April to 5 April. If your gross trading income is £1,000 or less, GOV.UK says you may not have to tell HMRC; above it, you can deduct the allowance instead of your actual expenses.
When must I tell HMRC about trading income?
The online-platforms page says that if your total trading income for the tax year is over the £1,000 allowance, you must tell HMRC.
Can I use the trading allowance if I have a job?
GOV.UK says the allowance cannot be used for income from your employer, a company you control or a partnership you are in. Income from your own selling, outside that job, is not in that list.
Can I use it if I want to claim a loss?
GOV.UK names claiming a loss as an exception to the “may not need to tell HMRC” rule for income of £1,000 or less, and the calculator’s note repeats it.
Does the calculator work out my tax?
No. It shows the profit figure for each option. The Income Tax on that profit depends on your other income, which the calculator does not ask for.
Should I keep records if I use the allowance?
Yes. GOV.UK tells you to keep records, and the actual expenses figure needs receipts behind it.
Checked 3 November 2026 against GOV.UK Tax-free allowances on property and trading income: £1,000 per tax year.
Related tools
- Vinted Tax Checker (UK): check whether each platform reports you to HMRC.
- What happens if I sell more than 30 items on Vinted?: the 30-sale reporting line explained.
- Reseller tax and reporting tools: all the reporting-threshold checkers.
- COGS Calculator for Resellers: add up the cost of the items you sold for the expenses figure.
- Reseller Income Calculator: estimate a year of reselling income.
- eBay UK Fee Calculator: the eBay UK fees that count as costs of selling.
- Vinted Fee Calculator: fees on a Vinted sale.
- Reselling Spreadsheet: keep sales and costs across the tax year.