HMRC trading allowance £1,000 explained

The UK trading allowance lets you earn up to £1,000 per tax year from casual trading income without paying income tax on it. For side hustlers on Vinted, eBay, or Depop, that is the first number to know — and the one people confuse with platform reporting.

What it covers

The allowance is for trading income: buying to sell, making things to sell, or running a small side business. A one-off wardrobe clear-out of your own clothes at little or no profit is often not treated as trading. If you regularly buy stock to flip, you are usually trading.

This page is a plain-English overview, not personal tax advice. Rules depend on your situation — check GOV.UK or a qualified adviser if you are unsure.

A simple example

Say you have already made £950 of trading sales this tax year, then sell another item for £80. Your gross sales go to £1,030 — over the £1,000 allowance. At that point you generally need to think about tax on the trading profit above the allowance (basic-rate taxpayers often estimate ~20% on taxable profit).

Our calculator shows a simplified exposure estimate for that sale when you enter your sales so far. It is a reality check, not a tax return.

Trading allowance vs DAC7

These are not the same rule:

• £1,000 trading allowance — about whether you may owe tax on trading profit.
• DAC7 platform reporting — about when eBay, Vinted, Etsy and others may automatically tell HMRC how much you sold (~£1,700 or 30 items).

You can be under the reporting threshold and still owe tax. You can also be reported and still owe nothing if you were not trading or made no taxable profit. Panic posts about “Vinted snitched” usually miss that distinction.

What to do if you're over

Keep records of sales, costs, and fees. If you need to file, a self-assessment return is the usual route. Tools like Taxd help some freelancers and side hustlers get a return done without a full accountant relationship.

Enter your sales so far (before this sale) in the Tax & HMRC fields on the profit calculator, then calculate. You'll see allowance headroom or a rough tax stamp when you've crossed £1,000.