The short answer
| Tax year | Trading allowance | Return due |
|---|---|---|
| 2025/26 (6 Apr 2025 – 5 Apr 2026) | £1,000 | 31 January 2027 |
| 2026/27 (6 Apr 2026 – 5 Apr 2027) | £1,000 | 31 January 2028 |
| 2027/28 (6 Apr 2027 – 5 Apr 2028) | £3,000 (announced) | 31 January 2029 |
The announcement says two things change from 6 April 2027 (Budget 2026, measure 1.5):
- The allowance triples to £3,000. It covers trading income (selling things you bought or made to sell, small services) and miscellaneous income, as now.
- The reporting threshold rises to £3,000 too. If your gross trading income is £3,000 or less, you won't have to declare it or pay tax on it. Today that line is £1,000.
Nothing changes for the tax return most sellers are worrying about right now: the 2025/26 return due 31 January 2027 uses the £1,000 allowance. So does 2026/27.
Quick check: the same year under both rules
Runs in your browser. Nothing you type is sent or stored. 2027/28 uses the announced £3,000 allowance; the Personal Allowance, tax bands and Class 4 rates stay frozen at 2026/27 levels (Budget 2026 Annex A).
Who it helps, and who it doesn't
- Small sellers between £1,000 and £3,000 of sales. The biggest change. Today they have to register for Self Assessment and file a return. From 2027/28 that income is covered in full: no tax, no return for it.
- Sellers with low costs and sales over £3,000. Makers selling digital patterns, print-on-demand, services, or anyone whose costs are under £3,000. They still file, but take £3,000 off instead of £1,000 (or instead of costs between £1,000 and £3,000), so up to £2,000 less is taxed.
- Resellers with real costs over £3,000. No difference. Stock is a cost, so most busy resellers already claim costs, and will keep doing so.
- People selling their own things. No difference: selling your own unwanted possessions generally isn't taxable at all, under either rule.
Five sellers, worked through
Illustrative, England, Wales and Northern Ireland rates. Use the check above for your own figures.
- Mia sells handmade cards on Etsy. £2,400 of sales, £300 of costs including fees, and a £28,000 salary. 2026/27: the £1,000 allowance beats her costs, profit £1,400, about £280 Income Tax, and she has to file. 2027/28: covered in full, £0 and no return for it.
- Priya sells digital planners. £8,000 of sales, £1,200 of costs, a £30,000 salary. 2026/27: she claims costs, profit £6,800, about £1,360. 2027/28: the £3,000 allowance beats her costs, profit £5,000, about £1,000. £360 less, and she still files.
- Sam resells trainers on eBay. £5,000 of sales, £3,500 of stock and fees. He claims costs in both years: profit £1,500 either way. No change.
- Jo flips car-boot finds on Vinted. £900 of sales. Already under £1,000, so no change: no tax, no return, either year.
- Dan resells full time. £20,000 of sales, £1,000 of costs, no other income. 2026/27: profit £19,000, about £1,286 Income Tax and £386 Class 4 National Insurance. 2027/28: the allowance wins, profit £17,000, about £886 and £266. About £520 less.
What doesn't change
- It's measured on sales, not profit. "£3,000" means gross trading income: everything buyers paid you, before platform fees and costs.
- Allowance or costs, never both. You pick whichever leaves less to tax.
- The trading test. Whether you're trading at all still depends on what you sell and why: your own old clothes aren't trading; buying to resell is. See the Vinted guide for HMRC's own examples.
- Platform reports. Vinted, eBay, Etsy and Depop still report sellers with 30+ sales or about £1,700+ in a calendar year. A report isn't a tax bill, and from 2027/28 more reported sellers will owe nothing. If HMRC writes, our HMRC letter guide helps.
- Who can't use it. Today's guidance says the allowance can't be used for income from a partnership, or from a company you (or someone connected to you) control, or from your employer. The announcement doesn't mention changing that.
- When you'd still want to file. Today you can choose to register even under the allowance, for example to claim a loss, pay voluntary Class 2 National Insurance, or prove self-employed income for Tax-Free Childcare or Maternity Allowance. Expect the same under £3,000.
What to do now
- Over £1,000 in 2025/26? You still need to register and file by 31 January 2027. The new allowance doesn't reach back. Late? See the late penalties guide.
- Selling now, in 2026/27? The £1,000 rule still applies to sales up to 5 April 2027. Keep records split at 5 April, so the 2027/28 year is easy to check against £3,000.
- Already in Self Assessment just for small sales? If your trading income stays at £3,000 or less from 2027/28 and nothing else needs a return, you can ask HMRC to stop sending one. Wait until HMRC updates its guidance and the law has passed.
- Making Tax Digital: unaffected. MTD's £50,000 / £30,000 / £20,000 tests look at income before any allowance or costs.
Keeping records
Every answer above starts from one number: your trading sales for the tax year, split at 5 April. Our bookkeeping spreadsheet for Etsy, eBay, Vinted and Depop sellers (£12.99, Excel or Google Sheets) totals that for you, with each sale's platform fee. It's made by the same people as this site, and it's optional: the calculator and guides stay free.
Prefer to ask an AI? Our free Seller Skills pack for ChatGPT, Gemini or Claude sorts a year of sales into tax-year totals and flags whether you look like a trader. Both give estimates, not advice.