There's a lot of misunderstanding about how high drones are allowed to go and it can cause some safety issues. The rules states that your drone should be no higher than 400ft (120m) above ground level and this is for both commercial and hobby pilots.
The confusion arises when the drone is airborne. The simplest way to think about it is to imagine a 400ft rope hanging from your drone and if at any point during your flight the end of the rope leaves the ground then you are too high.
WHY ITS IMPORTANT
It provides a 100ft separation between drones and manned aircraft. Manned aircraft are not allowed to fly lower than 500ft unless they have special permission from the CAA, are military or emergency service aircraft or they are an airspace catergory D.
Which also demonstrates why its important to have spotters and understand air space categories.