How each route works
The trading allowance route deducts a flat £1,000 from gross trading income — no receipts, no records beyond the income itself. (It's the same allowance that exempts sub-£1,000 side income entirely; used against higher income, it becomes a flat deduction instead.) The actual expenses route deducts what you genuinely spent — everything in our creator expenses guide, from kit to a slice of home costs.
The creator-specific pattern
Creators start cheap and get expensive: a phone-and-daylight channel might spend £300 a year (allowance wins by £700 of deduction); the first proper camera, mic and editing subscription push costs to £2,500+ (actual wins, heavily). The typical path is allowance in year one, actual from the first serious kit year — and because the election is annual, you can flip back in a fallow year. We simply compute both every January and tick the bigger one.
The loss angle most people miss
The allowance can't create a loss — deducting £1,000 from £600 of income just gives zero. Actual expenses can: spend £3,000 building a channel that earned £800, and that genuine trading loss may (rules permitting) be relievable against other income, including a PAYE salary — a real cash refund in a build year. If you're investing ahead of income, actual expenses aren't just bigger; they're strategic. See when posting becomes a business for the commerciality tests that come with it.
