Fill in the figures, then click Compare my options.
Result
The two routes side by side
| Route | Taxable profit | Income tax | Class 4 NIC | Total |
|---|
What you must do
| Step | What it means |
|---|
What it does, and what it leaves to you
- Covers: the £1,000 trading allowance against actual expenses, income tax at England/Wales/NI rates on top of your other income, Class 4 NIC, and the registration and filing dates.
- Gives: the cheaper route, the cost of the other, and a checklist.
- Not decided: whether your activity counts as a trade, which costs are allowable, Scottish tax bands, student loan or pension effects, the High Income Child Benefit Charge, partnership income, property income, VAT, payments on account amounts, and anything that changed after this was written.
Common questions
Do I need to tell HMRC about side income under £1,000?
No. If your gross trading income for the tax year is £1,000 or less, the trading allowance covers it: no tax, no Self Assessment registration and no need to declare it. The £1,000 covers all your trading and miscellaneous income together, not each activity.
Should I claim the £1,000 trading allowance or deduct my expenses?
Whichever leaves less taxable profit. If your real expenses are under £1,000 the allowance is better and needs no receipts. If they are over £1,000, deducting them usually wins. You cannot claim both on the same income.
What if my side income is over £1,000?
You must register for Self Assessment by 5 October after the end of the tax year, then file a return and pay by 31 January. Profits over the personal allowance of £12,570 also attract Class 4 National Insurance.
Who cannot use the trading allowance?
It is not available on income from your employer or a company you or your partner control, or from a partnership you are in.
Does this cover Scotland?
No. Scottish income tax bands differ; this tool uses the rates for England, Wales and Northern Ireland.
Is my data uploaded anywhere?
No. Everything is calculated in your browser and nothing is sent.