Budget triples the trading allowance to £3,000 and plans a Young Entrepreneurs Allowance

The trading allowance lets you earn a small amount from self-employment without paying tax on it. It is measured on your income before expenses.

According to HM Treasury, if all your trading income is £3,000 or less, you will not have to declare it or pay tax on it. The trading income reporting threshold for Self Assessment will also rise to £3,000. Both changes take effect from 6 April 2027.

Until then, the allowance stays at £1,000. If you earn more than that from a side business this tax year, the current rules still apply.

The Budget said a lack of support with personal finances is often a major barrier for people starting out. The pilot will give successful applicants support towards their living costs during the first year of their business.

That is all that has been published so far. The Budget gave no age range, amount, start date or application route.

A side income under £3,000 may soon need no paperwork at all. A business that needs money to get going is a different question.

Start Up Loans of £500 to £25,000 are open to people aged 18 or over who live in the UK with the right to work here. Every application is subject to a credit check and an affordability assessment. Students can apply too. Our new guide explains how a Start Up Loan works for students, including what your plan needs to show while you study.

Is your idea ready to grow beyond a side income? You can check whether you are eligible for a Start Up Loan in 60 seconds, with no credit search. myplan, our free workbook, then builds your plan and forecasts in around 30 minutes. Most applicants are approved within one to two weeks of submitting a finished application.