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Where Taxpayers and Advisers Meet

Both property and trading income

PeterLondon
Posts: 11
Joined: Wed Aug 06, 2008 3:49 pm

Both property and trading income

Postby PeterLondon » Mon Sep 02, 2019 8:26 pm

A friend of mine has

Income from property of about 17,500 = Rent of £20,000 less 2,500 expenses mostly agency fees
So 17,500 taxable

So clearly she should not claim the £1,000 tax free allowance on property income

I have helped her fill in that part of her tax return


Trading income of about £500 selling home made cakes income £800 less £300 expenses

Can she ignore this income on her tax return? Claiming the £1,000 tax allowance? As her trading income is less than £1,000

Jholm
Posts: 103
Joined: Mon Mar 11, 2019 4:22 pm

Re: Both property and trading income

Postby Jholm » Tue Sep 03, 2019 8:19 am

Declared the income and then claim the allowance rather than omit entirely

robbob
Posts: 2839
Joined: Wed Aug 06, 2008 4:01 pm

Re: Both property and trading income

Postby robbob » Tue Sep 03, 2019 8:32 am

Declared the income and then claim the allowance rather than omit entirely
Strictly speaking there is no need to complete a self employment page if one doesn't want too - hmrc specific advise on sa103f is as follows.
Total receipts from self-employment and miscellaneous income (see box 17 ‘Other taxable income’ on page TRG 8 of the Tax return notes)
of up to £1,000 are exempt from tax and do not need to be reported on a tax return.

PeterLondon
Posts: 11
Joined: Wed Aug 06, 2008 3:49 pm

Re: Both property and trading income

Postby PeterLondon » Tue Sep 03, 2019 10:17 am

Thanks to both of you for your replies.

When I came to complete her form one of the questions was do you have self employed income of more than £1,000 and she does not.

This meant there was no subsidiary sheet to fill in at all.

I was confused as she has both Trading income less than £1,000
+
Property income more than £1,000 and substantial expenses

I am glad to know she can does not need to declare the very minimal trading income using the £1,000 allowance and not loose the substantial
expenses she has on Property income

PeterLondon
Posts: 11
Joined: Wed Aug 06, 2008 3:49 pm

Re: Both property and trading income

Postby PeterLondon » Tue Sep 03, 2019 10:22 am

Declared the income and then claim the allowance rather than omit entirely
Strictly speaking there is no need to complete a self employment page if one doesn't want too - hmrc specific advise on sa103f is as follows.
Total receipts from self-employment and miscellaneous income (see box 17 ‘Other taxable income’ on page TRG 8 of the Tax return notes)
of up to £1,000 are exempt from tax and do not need to be reported on a tax return.

Thanks very much for taking the time to reply I was hoping this was the case

robbob
Posts: 2839
Joined: Wed Aug 06, 2008 4:01 pm

Re: Both property and trading income

Postby robbob » Tue Sep 03, 2019 11:42 am

I am glad to know she can does not need to declare the very minimal trading income using the £1,000 allowance and not loose the substantial
expenses she has on Property income
That would never have been the case anyway - the £1,000 trading allowance for sole trader and £1,000 allowance for rental income are both independent of each other - you can claim one allowance for each if you want or for one but not the other (and claim expenses for that other) so there would have been no problems entering £800 income claiming £800 allowance against sole trader then entering the rental expenses as normal.

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income
You can get up to £1,000 each tax year in tax-free allowances for property or trading income from 6 April 2017. If you have both types of income, you’ll get a £1,000 allowance for each.


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