[hua7450]

The Budget raises the trading allowance from £1,000 to £3,000 from April 2027. This standalone explainer covers choosing the allowance or actual expenses, including £400/£100/£0 employee examples, a £520 sole-trader gain and a £180 gain after Universal Credit adjusts.

The exclusions now explain that an employer or connected-party payment disqualifies an individual from allowance relief across relevant sources for the entire tax year, including the spouse/civil-partner and connected-partnership conditions. The wording follows HMRC guidance and ITTOIA 2005, sections 783AA and 783AO–783AQ. The dashboard introduction is accurate before and after the production switch.

The article preserves Max’s removal of obsolete national figures, keeping the Treasury-only costing table and linking to the canonical dashboard for PolicyEngine’s national estimates. Household assumptions and the missing-receipts/miscellaneous-income limitations remain explicit. No unsupported £71m sensitivity or 260,000-person count is included.

Stacked on property and shared analysis #1460; the diff remains only this article, its cover and metadata. Retarget after the base merges. Trading allowance and property #1460 are ready for review at the user’s request; savings #1466 remains a separate draft. Other authors’ main-branch post entries are preserved.

Method: pe.uk.calculate_household on policyengine 6.11.1 / UK 2.151.0 / core 3.33.3, October forecast on baseline and reform, fixed nominal 2027–28 inputs. Native line chart with exact breakpoints and £100 samples, verified at every £2.

Calculator companion: dashboard #292. Alex’s £30,000 salary / £4,000 receipts / £500 expenses case gives a £400 income-tax reduction. No claim is made that the current dashboard has an Alex preset.

Validation: primary HMRC and legislation sources checked; all monetary text, household-table rows and chart JSON unchanged from the reviewed article. The shared base passes formatting, lint, type checks and 6,571 tests (10 existing skips); the final trading article/metadata checks pass 18 tests, and merged metadata passes Prettier.

Review preview: trading allowance article.

Cover image: an original teal small-business illustration with parcels, a calculator, receipts and pound coins, generated with the built-in image tool. The 1672 × 941 WebP is 45 KB and supplies the article hero, research cards and social previews. Its prompt and checksum are recorded in the shared cover-prompts.json.

After the property/savings split, this branch merges the updated property branch forward without rebasing collaborators’ commits. Its introduction now links only the property explainer at /uk/research/uk-autumn-budget-2026-property-income-tax, as requested in the latest review. The diff against #1460 remains the trading article, its assets and its own metadata entry. The final 18 post-metadata/chart-content tests pass; trading calculations and chart data are unchanged.

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[MaxGhenis]

Trading allowance: the Universal Credit case's inputs, and a correction

This follows up REVIEW_NOTES on #1460, now that the post is here. My review is #1460 (comment).

• Inputs for the lone parent case (policyengine-uk 2.151.0, policyengine_uk.Simulation with Create Donate page #290's with_forecast(effective(...)) at ad32af7f, 2027):
  • one adult aged 40 earning £18,000, and one child aged 6;
  • region NORTH_WEST, tenure_type RENT_PRIVATELY, rent £9,000 a year;
  • would_claim_uc true;
  • self_employment_gross_receipts equal to self_employment_income (no expenses).
• At £3,000 or more of receipts: tax −£400, UC −£220, net +£180. This matches your £4,000 case.
• At £1,500: tax −£100, UC −£21, net +£79. I gave the work allowance as the reason without tracing it, and I've withdrawn that. Your −£55 / +£45 comes from different inputs. Neither run explains the gap, so I'd leave the £1,500 point out and show the £3,000-plus case.
• The 260,000 count and the £71m bound: agreed, keep them out of the article. They come from my internal runs, without receipts, and the £71m ignores the shared allowance.

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[MaxGhenis]

Max revised the rounding rule at about 15:55Z: whole pounds everywhere, worked household tables included, with pence only where a post spells out a formula. My earlier comment said pence could stay in worked tables, and I've corrected it.

In the sole trader table, that makes:

• Class 4: £386 before and £266 after;
• combined: £1,672 before and £1,152 after.

The reductions (£120 and £520) are unchanged.

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[MaxGhenis]

Costing section re-based on the OBR's policy breakdown: two commits, one OK needed

@hua7450 Max's rule for the Budget posts is now to cite primary sources. Compare with the OBR's line for the measure that matches what we model, give Table 6.1's rounded total as context, and call it "the government's costing, certified by the OBR". I pushed two commits to this branch: f80884d21 and, after an independent review, 1c43e6148. I also merged #1460's latest commit (4796551) forward, with no rebase. Only the costing text changed. No household figure, chart or other section moved.

What changed

• "Treasury costing" is now "The government's costing".
  • The table shows the OBR's “Income tax” and “NICs” lines for measure 15, summed: £221m, £165m, £171m and £178m from 2028–29. These are the taxes the examples cover.
  • Table 6.1's rounded total (£225m, £165m, £175m, £180m) is a second column, as context.
  • The other lines are named by Table 1.1's own labels (“PSCE in RDEL”, “Scottish BGA (current)”, “Scottish self-financed expenditure”). They add about £2m a year.
• Key-figures bullet: £221 million in 2028–29 on income tax and National Insurance, with Table 6.1's £225 million as context.
• No "Treasury" wording is left. The policy-costings link now reads "the Budget's policy costings".

Sources, checked against the files

• Table 1.1: the OBR detailed forecast tables, efo-october-2026-detailed-forecast-tables-policy.xlsx, sheet 1.1, measure 15, rows 77–82. The SHA-256 (cdcc2a06…) matches the copy recorded in uk-autumn-budget-dashboard-2026#300.
  • Income tax: 206.69, 154.31, 159.82, 165.98.
  • NICs: 14.65, 10.91, 11.28, 11.76.
  • Total: 223.22, 167.13, 173.04, 179.73. Its 2027–28 value is 1.85, all from the other lines.
• "About 93%": income tax is 93.4% of the sum in every year from 2028–29.
• "Certified by the OBR": the October 2026 EFO says "We have certified the costings for all but one measure in this forecast", and the exception is fuel duty. The Budget's policy costings say every costing was submitted to the OBR for certification.
• "The Budget's policy costings show the same rounded figures": p.23 shows +0m, +0m, −225m, −165m, −175m, −180m.
• The OBR link: it points to the EFO page recorded in Create Supporters page #300's provenance. obr.uk sits behind a Cloudflare check, so I couldn't open it from here; please click it once.

Review: an independent reviewer (GPT-6.1 Sol) checked the figures, labels, certification and the rest of the article for leftover wording. Its article points are in 1c43e61:

• the 93% share holds from 2028–29;
• NICs is spelled out at first use;
• the line labels are quoted;
• the costings document is noted as showing the rounded figures.

Ask: is this costing section OK to merge as it stands at 1c43e61? Your earlier OK covered the post before this change. Merge order is unchanged: #1460 first, then this.

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[MaxGhenis]

@hua7450 One more line, in f6af7fd7f. It applies the same fix Max made to the property post's dashboard line (#1460, 0620d73).

Line 10 now reads "Our Autumn Budget 2026 dashboard is where we publish estimates for the Budget measures we model." It used to say "for this and the other Budget measures". The production dashboard doesn't show the trading allowance until the dashboard's next deploy.

The ask: one OK that covers both the costing section above (1c43e61) and this line, at f6af7fd. #1460 merges tonight. After that I'll merge main in here (no rebase) so the diff is only the trading post.

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[hua7450]

@MaxGhenis OK to merge the trading allowance post with the content at f6af7fd, including both the revised government's costing section and the updated dashboard sentence. Please follow the agreed order: #1460 first, then retarget this PR to main, merge main in without rebasing, and merge once the required checks pass.

[MaxGhenis]

Approving the trading allowance post at f6fa173 (main merged in, no rebase).

• Max's yes, relayed by the Budget coordinator: "Yes, merge after #1460 (Recommended)". #1460 merged as 018ea75.
• Ziming's OK on the content at f6af7fd (6480814967). The trading article and cover at this head are byte-identical to that commit.
• Diff against main: only the trading article, its cover and its posts.json entry.

Checked:

• Household figures: every household figure was reproduced independently with PolicyEngine UK 2.151.0 and the October forecast at dashboard #290's head (5d18a5e2). That covers the side-business, sole-trader and lone-parent examples and the 18 chart points.
• National figures: the post carries no PolicyEngine national figures.
• Government's costing: the post compares with the government's costing, certified by the OBR, on its "Income tax" and "NICs" lines (OBR Table 1.1, measure 15). Those lines are £221m, £165m, £171m and £178m from 2028–29. Table 6.1's rounded total sits beside them as context. The figures were checked against the OBR file and reviewed independently, and every finding is fixed.
• Reach figures: neither the post nor the analysis folder publishes a reach, poverty, inequality or people-affected figure for trading.
• Rounding: whole pounds in every table, sentence case.
• CI: gh pr checks exits 0 at this head.

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[PavelMakarchuk]

Post-merge audit of the trading allowance post (article on main after #1481; live page checked at 1280 and 375 px). I checked the rules against the Budget, the costings, ITTOIA 2005, the HMRC manuals and the UC Regulations, re-derived every example and chart point by hand, and re-ran them on policyengine 6.11.1 / policyengine-uk 2.151.0 / core 3.33.3. No factual errors.

Must fix

1. The page scrolls sideways at 375 px. The Alex/Blair/Casey table (lines 34–38) is 541 px wide in a 343 px column; its wrapper has overflow-x: visible, so the layout widens to 557 px and cuts off the "Income tax before/after" and "Reduction" columns. The site's table renderer has no scroll wrapper (the property post overflows too, at 388 px), so the fix probably belongs there. A post-only workaround: drop the two "Taxable amount" columns or split the table.

Should fix

2. Rent-a-room exclusion is missing (line 22). HMRC's list has four exclusions (BIM86030, BIM86034); s.783AA(1)(b) excludes a rent-a-room trade.
3. The Self Assessment change is not mentioned. Costings p. 23: "Individuals with trading income at or below the allowance will not be required to report that income to HMRC through Self Assessment." Suggest one sentence in "How the allowance works".
4. Sign of the Table 6.1 column (lines 8, 372–381). Table 6.1 line 15 shows 0, 0, −225, −165, −175, −180; the post shows positive values, and line 370 discloses the sign convention only for the "Income tax and NICs" column. Also: "row 15" is the measure number (spreadsheet row 22), and lines 8 and 372 link to the landing page rather than the xlsx.
5. Lone parent: council tax set to 0 (lines 358–364, 391–393). trading_extensions.json has council_tax: 0, so Council Tax Reduction is not modelled; in practice CTR can also fall, so the £180 could be smaller. Suggest disclosing this.
6. Sources for 2027-28 values (lines 30, 341). The linked NI page shows £12,570 only to 2026-27; HMRC's "thresholds from 6 April 2026 to 5 April 2028" publication covers 2027-28. No source is given for the 2027-28 personal allowance or the 20% basic rate.
7. Chart marker labels. At 1280 px, "75% expenses equal £3,000" sits over the £3,000 line but marks £4,000; at 375 px all three labels stack between £1,000 and £4,000. Suggest "£4,000: expenses equal £3,000".
8. OBR Table 1.1 figures (lines 8, 370). £221m, the 93% income tax share and the PSCE/BGA lines link only to the EFO landing page. Link the detailed tables file, or keep only the Table 6.1 and costings figures.

Nice to have

• One term for "taxable amount" / "taxable income" / "taxable profit(s)", and for "current rules" / "current law".
• Explain the £1,333 kink in the chart (75% expenses equal the old £1,000 allowance).
• Line 5: "can save up to £400".
• Class 2 side effect (BIM86052): for example, £9,000 receipts give £8,000 profit under the old allowance and £6,000 under the new one, below the £7,105 Small Profits Threshold.
• Line 1: the Budget PDF now 301-redirects to 6ae20b85460c1346f7be784e (¶6.254 still p. 142).
• Line 356: cite UC reg 57(2) step 1 for "the allowance does not reduce UC profit".
• Optional: the dashboard's national figure (about £110m–£130m a year, £46m–£107m below the Treasury); its note gives the same coverage reasons as lines 395–402.

Verified as correct

• Rules: £1,000 → £3,000 from 6 April 2027 for trading and miscellaneous income (Budget ¶6.254, ¶4.100); property allowance unchanged; allowance or expenses, full relief when income does not exceed the allowance (s.783AE), losses treated as nil with election out (s.783AF, s.783AL); split between sources (s.783AK); partnership, employer and connected-party exclusions (s.783AA, s.783AO–783AP) for the whole year; the allowance reduces Class 4 profits; UC uses actual receipts less expenses, 55% taper, MIF only in gainful self-employment.
• Examples (by hand and in the model): Alex 600 → 200 (−£400; model 4,086 → 3,686); Blair −£100; Casey £0; £800/£200/£0 at 40%; sole trader income tax 1,286 → 886, Class 4 £386 → £266, gain 2,000 × 26% = £520; lone parent tax −£400, UC −0.55 × 400 = −£220, gain £180 (model UC 13,076.50 → 12,856.50); the limitations cases at lines 397–400.
• Chart: the JSON equals trading-allowance-chart.json (47 rows); both series checked against their formulas at 22 points.
• Model: trading_allowance_deduction at the 2.151.0 tag applies the better of the allowance and expenses automatically, and relieves only profit up to the allowance when receipts are missing, as the limitations say.
• Treasury: Table 6.1 line 15 wording and values, and costings p. 23, match apart from the sign (item 4); line 387 on non-comparability matches the dashboard's mapping.csv.
• Trading allowance explainer: active voice (wording only) #1481: wording only. Links return 200 except obr.uk; active voice, sentence case, neutral, and the UC offset is explained.

Not checked: OBR Table 1.1 (obr.uk 403; the figures are consistent with Table 6.1's £5m rounding), gross receipts in the population data, and the full text of UC reg 64.

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