Budget 2026: £3,000 trading allowance announced for April 2027
Published and checked on 29 October 2026. This update covers HMRC’s announcement published on 28 October.
Starting a small business or earning extra income from services? Yesterday’s Budget announcement is relevant to next year’s planning. It does not mean you can use the new figure on your current tax return.
What has been announced?
The government plans to increase the trading allowance from £1,000 to £3,000 from 6 April 2027. The trading income reporting threshold for Self Assessment will also rise to £3,000. Legislation is planned through Finance Bill 2026–27: this is a forthcoming change, not a new allowance available today.
Gross income is different from profit
The current £1,000 allowance is measured against relevant gross income before expenses. You cannot deduct actual expenses against the same income as well as claiming the allowance. Exclusions apply, including certain income from an employer or a connected company.
A useful preparation checklist
Create a simple record of income sources, payment dates and business costs. Add a short description of the goods or services behind each receipt. This gives your accountant a clearer starting point for separating tax years and comparing expense options.
Do not stop filing just because you have seen the new headline: existing obligations and other income need separate consideration. A £3,000 allowance is not a promise of a £3,000 refund from HMRC.
Talk to ZipTax
Bring an income and expenses summary to a consultation. We can help you understand how the announcement relates to your activity and prepare for Self Assessment, with the correct rules applied to the correct year.
