£1,000 Tax Allowance For Trading And Property Income
Did you know about it?
POSTED BY VICTORIA MOLN&AACUTE;R-BROWN ON 02/10/2017 @ 8:00AM
So many things come and go through the annual governmental budget, and we usually learn about it too far in advance to actually remember what the changes are when they come in to force ...
Did you know that there's a £1,000 tax allowance available to you?
copyright: illu / 123rf stock photo
Or we're already on to the next budget, and by that point, the original change doesn't seem as bad as the one that is coming. It is easy to lose track, or forget some of the amendments that may seem quite minor to most.
"I was reminded of one such policy recently: the £1,000 tax-free allowance for property and trading income!"
There is no longer a need to worry that your flurry into baking or allowing someone else to use your car parking space will have HMRC hunting you down to pay tax on income received; as long as it is below £1,000. This amendment was introduced in the budget in Spring 2016, and came into force as of 6 April 2017.
The aim was to "provide simplicity and certainty regarding income tax obligations on small amounts of income from providing goods, services, property, or other assets" according to HMRC.
This will come as a relief to many people who may have been supplementing their income by selling homemade gifts, selling items on Ebay (and other sites) or by letting rooms or car parking spaces via Airbnb and similar.
It also extends to people earning income offline too. The new policy also sets to remind those that may earn over more than £1,000 that they do have to declare their earnings to HMRC.
"So, how does it work?"
Full relief will be given to receipts totalling up to £1,000. The allowance can be used for 'miscellaneous' income, as long as the allowance is not used against any other trading income.
The relief can be partially used against receipts totalling more than £1,000 whereby the allowance is deducted from total receipts, as opposed to actual expenses (expenses are not taken into account).
Any income which attracts rent-a-room relief will not be eligible. The allowance can only be used once across all relevant income. This is the total income from trading income and any other miscellaneous income.
An election can be made for the full relief not to be given, and profits would have to be calculated in the standard way considering all receipts and expenses.
"Would you like to know more?"
If you'd like to find out more about what tax reliefs may be available to you, call us on 01908 774320 or click here to ping over an email and let's see how we can help you.
Until next time ...
More about Victoria Molnár-Brown ...
After seven years working in communication and marketing Victoria made the decision recently to change careers and enter into the world of accountancy, and is currently studying towards becoming an ACCA-qualified accountant.
Victoria is part of the accounts team, assisting with accounts preparation, CIS returns, VAT returns, personal tax returns and anything else that she can help with!
When Victoria isn’t studying or working she has a young son that keeps her occupied, and also enjoys playing netball, running and socialising with friends and family.
Victoria also plays the accordion, having been UK Solo Accordion Champion for her age group on three separate occasions, and enjoys playing in a barn dance band and giving talks about the instrument to local groups.
More blog posts for you to enjoy ...