Self Assessment - Trading Allowance v Exps

I receive a gross income of around £3,000 per annum through self employment. My accountant usually claims £300 expenses on my tax return plus their bill for their services (£200) and therefore reporting my taxable profit as £2,500. I'm looking to do my own return this year, should I still claim expenses or could I use the £1,000 trading allowance instead?         

Comments

  • uknick
    uknick Posts: 1,604
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    Assuming you qualify for the trading allowance, you can claim either the full trading allowance or actual expenses.

    If you do qualify from what you've written you ought to claim the trading allowance as that exceeds your actual expenses.  I'm somewhat surprised your accountant hasn't done this.  Or, does your total taxable income stay below your personal allowance in which case the expenditure figure used is moot.

  • uknick said:
    Assuming you qualify for the trading allowance, you can claim either the full trading allowance or actual expenses.

    If you do qualify from what you've written you ought to claim the trading allowance as that exceeds your actual expenses.  I'm somewhat surprised your accountant hasn't done this.  Or, does your total taxable income stay below your personal allowance in which case the expenditure figure used is moot.


    So basically my pensions alone are above the Personal allowance and are declared accordingly on the return.  The additional income is all subject to tax, so business expenses have been claimed previously on my self assessment (completed by the accountant).  I cannot see any reason why I would not be eligible to use the Trading allowance instead and indeed the online SA permits me to enter the allowance having removed the expenses amount. Thanks for your help. 
  • uknick said:
    Assuming you qualify for the trading allowance, you can claim either the full trading allowance or actual expenses.

    If you do qualify from what you've written you ought to claim the trading allowance as that exceeds your actual expenses.  I'm somewhat surprised your accountant hasn't done this.  Or, does your total taxable income stay below your personal allowance in which case the expenditure figure used is moot.


    So basically my pensions alone are above the Personal allowance and are declared accordingly on the return.  The additional income is all subject to tax, so business expenses have been claimed previously on my self assessment (completed by the accountant).  I cannot see any reason why I would not be eligible to use the Trading allowance instead and indeed the online SA permits me to enter the allowance having removed the expenses amount. Thanks for your help. 
    Is there any connection between your business and employment?

    That is one situation where the trading allowance isn't available to be used.
  • uknick said:
    Assuming you qualify for the trading allowance, you can claim either the full trading allowance or actual expenses.

    If you do qualify from what you've written you ought to claim the trading allowance as that exceeds your actual expenses.  I'm somewhat surprised your accountant hasn't done this.  Or, does your total taxable income stay below your personal allowance in which case the expenditure figure used is moot.


    So basically my pensions alone are above the Personal allowance and are declared accordingly on the return.  The additional income is all subject to tax, so business expenses have been claimed previously on my self assessment (completed by the accountant).  I cannot see any reason why I would not be eligible to use the Trading allowance instead and indeed the online SA permits me to enter the allowance having removed the expenses amount. Thanks for your help. 
    Is there any connection between your business and employment?

    That is one situation where the trading allowance isn't available to be used.
    Not sure I follow that, could you give an example to explain? Do you mean if I ran a company or worked for a company that was associated with my separate business, then the trading allowance is not applicable?  My only other income are pensions and share dividends. 
  • uknick said:
    Assuming you qualify for the trading allowance, you can claim either the full trading allowance or actual expenses.

    If you do qualify from what you've written you ought to claim the trading allowance as that exceeds your actual expenses.  I'm somewhat surprised your accountant hasn't done this.  Or, does your total taxable income stay below your personal allowance in which case the expenditure figure used is moot.


    So basically my pensions alone are above the Personal allowance and are declared accordingly on the return.  The additional income is all subject to tax, so business expenses have been claimed previously on my self assessment (completed by the accountant).  I cannot see any reason why I would not be eligible to use the Trading allowance instead and indeed the online SA permits me to enter the allowance having removed the expenses amount. Thanks for your help. 
    Is there any connection between your business and employment?

    That is one situation where the trading allowance isn't available to be used.
    Not sure I follow that, could you give an example to explain? Do you mean if I ran a company or worked for a company that was associated with my separate business, then the trading allowance is not applicable?  My only other income are pensions and share dividends. 

    This should be worth a read.  But if you're not in employment there shouldn't be an issue.

    https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income#cannot
  • Yes, I have been reading that. No I am not in employment. Thanks.  
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