Do You Need Self Assessment If You Earn Under £1,000
If your total self-employment income is under £1,000 per tax year, you probably do not need to register for Self Assessment or file a return. The £1,000 trading allowance covers you automatically.
The Trading Allowance
The trading allowance provides £1,000 of tax-free income from self-employment or casual services. If your gross income (before expenses) is below this amount, you do not need to:
- Register as self-employed
- File a Self Assessment return
- Pay any tax on the income
When You Still Need to Register
Even with income under £1,000, you must register if:
- You want to claim expenses against the income (which would make the trading allowance redundant)
- You want to pay voluntary Class 2 NI to protect your State Pension
- You have other reasons requiring Self Assessment (rental income, capital gains, etc.)
Above £1,000
Once your gross self-employment income exceeds £1,000, you must register for Self Assessment. You then choose between:
- Deducting the £1,000 trading allowance instead of actual expenses
- Deducting your actual expenses (better if they exceed £1,000)
Property Allowance
There is also a separate £1,000 property allowance for rental income, working the same way.
Accounted helps you understand your obligations and manage your records once you need to register.
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Tax & Compliance Specialists
Our tax specialists have decades of combined experience in UK sole trader and small business taxation, MTD compliance, and HMRC submissions. All content is reviewed against current HMRC guidance before publication and updated quarterly to reflect legislative changes.
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