A reminder after our previous post here.
From 6 April 2017 there are two income tax allowances each of £1,000. The first is for small trading activities or miscellaneous income. This could be eBay sales or a rare items hobby for example. The second is for letting which might cover income from driveway letting or air BnB.
If you have trading income with a gross total of £1000 then for tax year 2017-18 you can simply leave this off of your tax return. If you have trading income of more than £1000 then for tax year 2017-18 you can choose to deduct £1000 or the actual expenditure. The new allowance cannot create a loss. This new allowance does not apply to profits from partnership income.
Exactly the same applies to letting income (excluding rent a room relief, payments from employer and any letting against which mortgage relief is claimed). So you could have up to £2000 income exempt from tax under these new provisions (£1000 trading and £1000 letting).
These new allowances do not apply to the 2017 tax return, only from the 2018 tax return onward.
As with all of our tax tips and web pages this information is necessarily summarised and of a general nature. If you would like detailed specific advice please contact us.