What is the £1,000 trading allowance?

The £1,000 trading allowance is one of the most useful things a UK seller can understand, and one of the most misunderstood. It is the reason a lot of people who sell online owe nothing at all. Here is what it is, in plain English, and how to work out whether it covers you.

General information, not tax advice. Check with HMRC or a qualified accountant before you act on it.

What the trading allowance actually is

The trading allowance lets every UK taxpayer earn up to £1,000 a year from casual selling or self-employment without paying tax on it, and usually without having to tell HMRC. It was brought in so people with tiny side incomes do not have to fill in a tax return for the sake of a few pounds. If your selling is small, it very likely has you covered.

It is based on your sales, not your profit

This is the part that trips people up. The £1,000 is measured against your total sales, before any fees, postage or the cost of your stock come off. So if you sold £1,300 of items but only made £200 after eBay took its cut, you are still counted as over the allowance, because sales are what matter here. It is worth checking your gross sales figure for the year rather than guessing from what landed in your bank.

Under £1,000: usually nothing to do

If your total trading sales in a tax year come to less than £1,000, you normally have nothing to report and nothing to pay. You do not need to register for Self Assessment, and you do not need to keep formal accounts. It really is that simple for a lot of casual sellers.

Over £1,000: the allowance or your real costs

Go over £1,000 in sales and you will usually need to register for Self Assessment and report the income. But registering is not the same as owing money. When you work out your taxable profit, you can take off either the flat £1,000 allowance or your actual costs, whichever leaves you with less to be taxed on. Actual costs include selling fees, postage, packaging and what you paid for the stock. If your costs come to more than £1,000, use the real costs. If they come to less, use the flat allowance.

It is separate from your personal allowance

The trading allowance is not the only thing standing between you and a tax bill. On top of it, you have your personal allowance, which is £12,570 for the 2026/27 tax year. If your reselling profit plus any other income, such as a day job, stays under that, there is often no income tax to pay at all, although you may owe some Class 4 National Insurance once your profit passes its own threshold.

One allowance, shared across everything

You do not get a separate £1,000 for eBay, another for Vinted and another for Depop. It is one £1,000 allowance across all your trading put together. So if you sell on more than one platform, add the sales up before you compare against the limit.

How to check where you stand

The quickest way to know is to add up your gross sales for the tax year and see if they clear £1,000. If they do, add up your costs to see whether the flat allowance or your real expenses work out better. FlipTally does this for you from your eBay and Vinted figures, but the maths above is all it comes down to. This is general information rather than advice, so check anything important with HMRC or an accountant.

Frequently asked questions

This guide is general information, not tax advice, and reflects the UK rules for the current tax year. Always check with a qualified accountant before you file. FlipTally is independent and not affiliated with, endorsed by or connected to eBay, Vinted, Depop or HMRC. Last updated 2026-08-03.