£1,000 allowance or expenses?

Side hustle or a bit of rental income? Compare the £1,000 allowance with your real costs and see which leaves less to pay tax on.

Type of income

Self-employed or side hustle (trading allowance) Renting out property (property allowance)

Income for the tax year, before costs Your real allowable expenses for the same year

How it works

There are two separate £1,000 allowances: one for trading income and one for property income. You can have both.
If your income (before costs) is £1,000 or less, the allowance covers it all: you don't need to tell HMRC about it unless you want to, for example to claim a loss.
If it's over £1,000, you choose: take £1,000 off your income instead of your real expenses, or claim your real expenses as usual. You can't do both.
Using the allowance means you can't claim a loss, so if your costs are higher than your income, claim your expenses instead.
The trading allowance can't be used against income from your own employer, your partnership, or a company you or your family control. The property allowance can't be used alongside Rent a Room relief on the same income.

General information, not tax advice. See GOV.UK: tax-free allowances on property and trading income, or ask an accountant before you file.

Keep the numbers in one place. The Self Assessment Tracker (£12) adds up income and expenses through the year, so you can see which option wins before January.