Trade income allowance on foreign income

fryderykchopin · 11 May 2022 at 9:30AM

I hope this is an appropriate place to post this.

I am academic staff in a UK based university as a regular employee with a work contract, paying taxes and NIC via PAYE.

In addition to this, I receive some additional income from an overseas university for providing services such as research outputs, seminars to their students, etc. There is no work contract with the overseas university, just a formal collaboration agreement. According to an earlier response I received in this forum, I declare this additional income in my self assessment as 'any other income' in the 'Other UK income' section and do not include anything in the foreign income section as it is not taxed overseas (there is a double taxation agreement with the UK).

I don't have any registered business and haven't registered this in any formal way, I'm just a regular UK employee with this additional income. The info I have read in HMRC pages suggests that this can be seen as miscelaneous income rather than self-employment income, and since it is above £1000 per year I am wondering if I can claim the 'trade income allowance', in other words, deduct £1000 from the amount of income that I include in my tax return.

If the answer is yes, how far back in time could I go to ammend this in previous tax returns. I can see that I have the option to ammend the previous tax return (2020-21), but what about older tax returns?

Thank you

[Deleted User] · 11 May 2022 at 10:27AM

Question - are you trading? It appears not.

fryderykchopin · 11 May 2022 at 11:04AM

[Deleted User] said:

Question - are you trading? It appears not.

I'm not entirely sure about the definition of trading for tax purposes but this is not something I offer as a service to anyone willing to pay for it. This is more like a one-off one-to-one agreement between the overseas university and me. We got in contact through a common colleague, they were happy to pay some compensation for me doing some specific tasks - and I was happy to do it for the pay. This is unlikely to lead to any business-like activity in the future (most likely it will terminate after a few years, we current renew the agreement every year as long as we are happy to continue).

To be honest I have no clue about how this is seen for tax purposes and whether I can claim the trading income allowance.

Any guidance would be much appreciated.