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The short answer
If your gross trading income for the tax year, including small jobs for Nigerian clients, is £1,000 or less, the trading allowance generally means you do not have to tell HMRC or pay tax on it. Above £1,000, you must register for Self Assessment, and can either deduct the £1,000 allowance or your actual expenses, but not both. It does not apply to income from a partnership or from your own company.
A lot of Nigerians in the UK earn a little on the side from home: editing a CV for a cousin's friend in Abuja, designing a flyer for a Lagos church event, tutoring online, reselling goods. The trading allowance is a simple rule that takes very small amounts out of the tax system. Knowing where the line is saves you either an unnecessary tax return or a penalty for missing one.
How the allowance works
GOV.UK's guidance on tax-free allowances on property and trading income (last updated 8 May 2019, and still the current page) sets out the rules:
- What it covers
- Trading income from self-employment, casual services such as babysitting or gardening, and hiring out personal equipment.
- How much
- Up to £1,000 a year of gross trading income, before any expenses.
- Full relief
- Gross income of £1,000 or less: you generally do not need to tell HMRC.
- Partial relief
- Gross income over £1,000: you can deduct £1,000 instead of your actual expenses.
- Not both
- You cannot deduct expenses as well as the allowance for the same income.
- Registering
- Over £1,000: register for Self Assessment by 5 October after the tax year.
What it does not cover
- Trading income from a partnership, including your share of one.
- Income from a company you, or someone connected with you, owns or controls.
- Income from your employer or your spouse's or civil partner's employer.
Does income from Nigerian clients count?
Yes. Money paid by a Nigerian client for work you do in the UK is still trading income, and counts towards the £1,000. The GOV.UK guidance does not discuss trades carried on wholly abroad; if you run a business that operates in Nigeria (a shop in Lagos, say), that is a different question to put to HMRC or an accountant. Money your family sends you as a gift is not trading income at all.
Worked examples
Examples only.
| Person | Gross income | Expenses | Best option | Taxable profit |
|---|---|---|---|---|
| Ife, CV editing for Nigerian clients | £850 | £40 | Full relief, no need to tell HMRC | £0 |
| Segun, flyer design | £1,600 | £300 | Deduct £1,000 allowance | £600 |
| Amaka, online reselling | £2,400 | £1,700 | Deduct actual expenses | £700 |
Segun and Amaka must both register for Self Assessment, because their gross income is over £1,000. For Amaka the allowance would leave £1,400 taxable, so actual expenses are better.
When the allowance stops being the right tool
The allowance suits small, occasional earnings. Once side work becomes regular, for example a steady stream of design jobs for Nigerian churches and businesses, three things change. Your gross income will cross £1,000 sooner than you think, especially if a single Nigerian client pays a few hundred pounds a month. Your real costs (software, a laptop, phone data) may be higher than £1,000, making actual expenses better. And if you plan to grow, a proper record from the start makes the move to full Self Assessment, and later Making Tax Digital, far easier. Check the running total each quarter rather than at the end of the year.
Reasons to register anyway
GOV.UK lists reasons you may want to file even under £1,000: to claim relief for a loss, to pay voluntary Class 2 National Insurance, or to claim Tax-Free Childcare or Maternity Allowance based on self-employment.
The withholding tax catch
A Nigerian company that pays you may deduct withholding tax; under the 2024 regulations, PwC's summary gives 10% on professional fees paid to non-residents. Normally you can set that Nigerian tax against your UK tax on the same income. But HMRC helpsheet HS263 limits the credit to the UK tax due on that income. If the trading allowance means you owe no UK tax, there is nothing to set the Nigerian tax against, and the WHT is simply a cost. On a few hundred pounds it rarely matters, but it is worth knowing before you agree a gross fee.
Records
Even under the allowance, keep a simple record: date, client, amount, currency and the pound value on the day. GOV.UK suggests invoices, bank statements and a diary of income from each customer. If your side income grows, those records make the first tax return far easier. For conversion, see converting naira income to pounds.
Related: registering as self-employed for Nigerian client income.
Where Pryme fits
Keeping side income in its own place makes the £1,000 test easy to check. A Pryme account can receive naira from a Nigerian client and hold it with pounds, and the statement lists each payment with its date. Convert with Swap when you choose; see multicurrency accounts.
Questions people ask
Do I pay tax on small side income from Nigerian clients?
If your gross trading income for the year is £1,000 or less, the trading allowance generally means no tax and no need to tell HMRC.
What happens if my side income is over £1,000?
You must register for Self Assessment by 5 October after the tax year. You can deduct the £1,000 allowance or your actual expenses, not both.
Is the trading allowance based on profit or income?
Gross income, before expenses, according to GOV.UK.
Can I claim credit for Nigerian WHT if I use the allowance?
Foreign tax credit is limited to the UK tax on the same income. If you owe no UK tax on it, there is nothing to set the WHT against.
Sources
- GOV.UK: Tax-free allowances on property and trading income (updated 8 May 2019) · accessed Oct 2026
- GOV.UK: Register for Self Assessment (updated 8 Oct 2026) · accessed Oct 2026
- PwC Nigeria: highlights of the Deduction of Tax at Source (Withholding) Regulations 2024 · accessed Oct 2026
- HMRC: Relief for foreign tax paid 2026 (HS263, updated 6 Apr 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.