Short answer
From 6 April 2027 the Trading Allowance triples from £1,000 to £3,000. If your total gross income from self-employment or side hustles in a tax year is £3,000 or less, you generally won't pay tax on it or need to report it. Above that, you can deduct either the £3,000 allowance or your actual expenses.
What's changing
The Income Tax Trading Allowance rises from £1,000 to £3,000 from 6 April 2027, to support people taking first steps in small business. Budget 2026
Until then, the £1,000 limit applies for the 2026/27 tax year.
Turnover, not profit
The allowance is based on gross income — what customers pay you — not profit.
If your costs are higher than £3,000, claiming actual expenses may reduce your tax more than the allowance. You can't use both.
Simple habits to start with
Keep side-hustle money in a separate account and keep a simple record of income and costs.
Set aside a share of income for tax once you go over the allowance. HMRC and MoneyHelper have free guidance.
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Questions
Questions people also ask
When does the £3,000 Trading Allowance start?
From 6 April 2027, the start of the 2027/28 tax year.
Is the £3,000 based on profit or income?
On gross income before expenses.
Do I need to file a tax return for a small side hustle?
Generally not if your gross trading income is within the allowance and you have no other reason to file. Check HMRC guidance for your situation.