Starting from the tax year ending 5 April 2018, the government has introduced a new £1000 trading allowance for sole traders.
If you earn less than £1000 in self-employed income
This might apply if you have a job where you earn PAYE and you have a side-hustle. You can earn up to £1000 in the tax year on your side gig before you have to declare it.
If this applies to you, you don't have to register as self-employed, and you don't need to do a tax return.
And if you earn more than £1000
If you run your business as a "sole trader", you now have an option to take a simplified approach to your tax return:
Record your allowable expenses and then subtract these from your income, so you calculate tax on a lower number.
Alternatively, use the "trading allowance" to deduct £1000 from your income, but you'll be unable to claim any other expenses.
You can decide which one you use each year, so the best thing to do is keep track of your expenses throughout the year, and if they're less than £1000, use the allowance instead.
Find out more
You can read more about the trading allowance on the gov website.