Trading Allowance eligibility

mj73

Hi All,

Is anyone able to confirm please whether a sole trader who did some freelance work for an organisation whilst they were only a sole trader and not employed, but later, after the freelance work had been completed, became an employee of the same organisation during the same tax year, would be eligible to claim Trading Allowance?

The Gov.uk page says you can't claim the allowance if you have trade income from your employer, but what if they weren't an employer at the time when the income was earned?

Thanks in advance for any help, it is much appreciated.

00ec25

the wording used is "at a time when"

so as you did not receive the self employment income at a time when you were an employee of the payer then I'd say you can claim the trading allowance even though, as you say, the events are in the same tax year since you have two distinct "sources" of income in timeline terms: the sole trader and the employment

https://www.gov.uk/hmrc-internal-manuals/business-income-manual/bim86036

Pennywise

You say as a sole trader. If you were already a sole trader at the time for other customers/clients, then the freelancing work would just be more sole trader income so the trading allowance would be available towards your total sole trader income (if you chose instead of claiming expenses).

mj73

Thanks for the replies.