Two separate £1,000 tax allowances for property and trading income were introduced in April 2017. If you have both types of income highlighted below then you can get a £1,000 allowance for each.
The £1,000 exemptions from tax apply to:
- If you make up to £1,000 from self-employment, casual services or hiring personal equipment. This is known as the trading allowance.
- The first £1,000 of miscellaneous income for income from property. For example, from renting a driveway. This is known as the property allowance. The allowance is not available on income from letting your own home where a separate relief may be available using the Rent a Room Scheme.
Where each respective allowance covers all the individual’s relevant income (before expenses) the income is tax-free and does not have to be declared. Taxpayers with higher amounts of income will have the choice, when calculating their taxable profits, of deducting the allowance from their receipts, instead of deducting the actual allowable expenses. There are restrictions if the income or rents are generated by dealings with companies or partnerships of which the recipient is a participator or partner.
If you are considering if you can claim these allowances, please let us know and we can investigate for you.