Trading Allowance vs Expenses Calculator | NoMoreJanuary
Free calculator comparing the £1,000 trading allowance against your actual expenses. See which method saves you more tax in seconds.
If you're self-employed, you have two ways to reduce your taxable profit: claim the£1,000 trading allowance (a flat deduction, no receipts needed) or deduct youractual business expenses (requires record-keeping). The right choice depends on how much you spend — and this calculator shows you instantly which method wins.
Enter your self-employment income, your actual expenses, and your tax bracket below. The calculator compares both methods side by side, shows you the tax due under each, and tells you which one to claim.
Trading Allowance vs Expenses Calculator
Enter your figures below to see which method saves you more tax.
Claim actual expenses — you'll pay £1,000 less tax. Your taxable profit drops to £24,000 vs £29,000 with the trading allowance.
Frequently Asked Questions
What is the £1,000 trading allowance?
The trading allowance lets you deduct a flat £1,000 from your self-employment income instead of claiming actual business expenses. If your income is below £1,000, the allowance covers it entirely and you may not need to file a Self Assessment at all. If your income is above £1,000, you can choose between the allowance or your actual expenses — whichever gives you a lower tax bill.
Can I use the trading allowance if my expenses are higher than £1,000?
Yes, but it probably won't save you money. If your actual expenses are more than £1,000, claiming actual expenses will usually give you a larger deduction and lower your taxable profit further. This calculator shows you both results side by side so you can see which is better.
Can I switch between the trading allowance and actual expenses each year?
Yes. You can choose whichever method gives you the best result each tax year. There's no requirement to stick with one method permanently. Just make sure you keep records of your actual expenses in case you want to claim them instead of the allowance.
When can't I use the trading allowance?
You cannot use the trading allowance if the income comes from your employer (or your spouse's employer) — for example, if you do occasional work for the company you work for. You also cannot use it for partnership income. In these cases, you must claim actual expenses.