How barter affects your tax

When two businesses exchange services instead of money, HMRC treats each side as if it had been paid the cash market value of what it provided. That value counts as trading income for both parties, and is reported in the same way as a paid job.

You need a record of what was swapped, its value, and who with. Trade 4 Trade's swap log does this automatically: each agreement, its status, and its completion are stored on your trades list, so you have the details ready when you fill in your return.

Business-to-business barter is treated as trading income for both sides. Casual or hobby swaps between individuals who are not trading are different, and may not count as taxable income, depending on the circumstances. If you are unsure whether you are trading, check HMRC's guidance or speak to an accountant.

This page is general information, not tax advice. Rules can change and everyone's situation is different, so check the latest HMRC guidance or get professional advice before relying on this.