This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

The £1k trading allowance

Qwerty123
Posts:1
Joined:Mon Jan 20, 2020 2:51 pm
The £1k trading allowance

Postby Qwerty123 » Mon Jan 20, 2020 2:53 pm

I have a question regarding the £1000 trading allowance introduced by George Osborne from 2017/18 onwards.

I work full-time and pay tax via PAYE. If I were to earn some additional income (less than £1000) from publishing (e.g. the occasional article) would this be exempt from tax thanks to this 'trading allowance'? I understand that the trading allowance can be used against 'miscellaneous' income but I am struggling to find a clear definition of what this does or does not include.

Second question: if such income from publishing is indeed exempt, if I was to earn over £1k from this activity would it ALL become taxable, or just the element over £1k?

Thanks in advance for any insight.

robbob
Posts:3228
Joined:Wed Aug 06, 2008 4:01 pm

Re: The £1k trading allowance

Postby robbob » Tue Jan 21, 2020 6:04 am

Hello Qwerty

Generally speaking you are fine to earning 1k Tax and reporting obligation free whether it’s casual income or a more official sole trader type business.

If your income exceeds 1k the choice is yours whether you only pay tax on income over 1k or whether full income is taxable but you claim expenses reacting to your trade - eg as soon as your allowable expenses exceed 1k you would declare full income and claim expenses. In summary you always get 1k tax free and can get more if you are expenses heavy.

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#trade


Return to “Income Tax”