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Simplicity with strings
Key points
- The £1 000 trading allowance introduced in 2017 provided a welcome simplification for many taxpayers but there are complexities to be aware of.
- The allowance can be claimed in two ways – full relief and partial relief.
- A taxpayer who claims full or partial relief cannot deduct any business expenses.
- It is the gross amount of income that needs to be under £1 000 for the allowance to apply.
- There are a number of exclusions from the trading allowance including income from partnerships or from the individual’s employer.
The £1 000 trading allowance was first introduced in 2017 and has provided a welcome if rather low profile simplification for many taxpayers ever since.
The allowance unexpectedly came back into the spotlight early this year when new reporting requirements for digital platforms were widely (and wrongly) reported as a ‘side hustle tax’ on...
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