Self-Employed Pet Boarder? The £1,000 Trading Allowance and Making Tax Digital, Explained
Plenty of boarders start with a couple of guests in a spare room, and the income grows from there. At some point you need to know whether HMRC has to hear about it. The answer depends on how much you take, and the rules for larger sole traders change from April 2026.
This covers the £1,000 trading allowance and Making Tax Digital for Income Tax. It's general information, not tax advice, so check your own position with HMRC or an accountant.
The £1,000 trading allowance
Every individual gets a tax-free allowance of up to £1,000 a year on trading income. It covers self-employment and casual services, which includes looking after someone's pet.
If your gross trading income for the year is £1,000 or less, you may not have to tell HMRC at all. Gross means what customers paid you, before any costs. The £1,000 is shared across all your trades, so you can't claim it separately for each side income.
Over £1,000
Once gross trading income goes over £1,000, you need to register for Self Assessment and put the income on a tax return. You then choose how to work out your taxable profit. You can deduct the £1,000 allowance, or deduct your actual expenses, but not both.
Two examples with made-up numbers, for a boarder who took £6,000 over the year:
With £700 of expenses, the allowance leaves £5,000 taxable and claiming expenses leaves £5,300. The allowance is better.
With £2,500 of expenses, the allowance still leaves £5,000 taxable, but claiming expenses leaves £3,500. Expenses are better.
Boarders with bedding, food, cleaning supplies, licence fees, advertising and insurance to pay for will often come out ahead by claiming real expenses, as long as they have the records to back them up. The allowance doesn't apply to income from a partnership, so if you run the business with a partner, check how it works for you.
Making Tax Digital for Income Tax
Making Tax Digital (MTD) replaces the single annual return with digital records and quarterly updates to HMRC. It's being phased in by income:
From April 2026: qualifying income above £50,000
From April 2027: above £30,000
From April 2028: above £20,000
Qualifying income means gross income from self-employment and property, before expenses or allowances. A boarding business taking £55,000 with £20,000 of costs is measured against the £50,000 line using the £55,000, not the profit.
If you're covered, you keep digital records, use MTD-compatible software and send HMRC a summary of income and expenses each quarter. HMRC's guidance is the place to confirm whether and when it applies to you.
Keeping records through the year
Whichever side of the line you're on, it's easier to record every payment and cost as it happens than to rebuild them from bank statements in January.
PetPortal's Payments page keeps each deposit, balance and refund against the booking it belongs to. On Starter and Pro, Finance adds revenue reports, an expenses log, a tax-year summary and CSV export. PetPortal isn't HMRC-approved MTD software, but it gives you the figures to take into whichever tool you use. You can try PetPortal free.
Sources
Correct as of October 2026. Tax rules change, so check the latest guidance on GOV.UK.