Am I trading?
A free check against HMRC's badges of trade and the trading allowance, for the 2026 to 2027 tax year. It shows which way your answers point and whether you need to tell HMRC about the income. It is not a ruling and not tax advice.
Which way your answers point
The questions cover what you sell, whether you do it for profit, how often you sell, how you find customers and, for items, how you came to have them, how long you keep them and whether you change them before selling. Each answer is placed on the matching badge of trade from HMRC's Business Income Manual (BIM20205), and two badges the tool does not ask about are shown as not asked.
HMRC says no single badge settles whether something is a trade: the courts go on the overall impression from all of them. So the tool gives a direction (towards trading, mixed or away from trading), never a verdict.
Telling HMRC
The trading allowance is a countable rule, so this part is answered plainly. If gross trading income is within the allowance and the allowance can be used, you do not need to tell HMRC unless you need a tax return for another reason. Over it, you register for Self Assessment by 5 October after the end of the tax year.
The allowance cannot be used for income from a company you or someone connected to you owns or controls, from your or your spouse's or civil partner's employer, or from a partnership. Partners follow the partnership registration route instead. The page also says when Making Tax Digital for Income Tax may apply, and links to the GOV.UK pages for each rule.
Common questions
What are the badges of trade?
The signs HMRC and the courts use to decide whether an activity is a trade, such as a profit-seeking motive, the number of transactions and the way the sale is carried out. No single badge settles it.
Can I be employed and self-employed at the same time?
Yes. GOV.UK says you can run a business and be employed at the same time.