Self Assessment: Trading Allowance?

lolacherry

Hi,
I am currently filling out my SA for a small business I have and wondered if someone could help me with one of the questions.

I am part time employed (pay and health benefits) (around 14k)
I also run a small business, and I brought in around £4800 over the year.

I have seen a section asking me "Trading Income Allowance (optional)"
I'm a little confused - I am aware you have a £1000 threshold for a hobby business before you need to register to complete a self assessment.
Does this question mean that I could request £1000 TIA?  My outgoings total expenses are only £240.

Not sure if I'm allowed to claim this instead of my expenses 

Any advice would be great.  Next year, an accountant 😅

uknick

You are allowed to claim either the trading allowance up to £1,000 or your actual expenditure, but not both.

You can't use the allowance to turn income into a loss.   Therefore, if your income is below £1,000 then you can only use the trading allowance up to your income, e.g. if your income is £950, you can only claim £950 of the allowance.   And, there is no carry forward for any unused allowance. 

In your case it would seem the more sensible option would be to claim the trading allowance of £1,000.  But, your decision will have to take into account your overall financial position and whether you may benefit from a higher profit figure; for instance if you're looking to raise funding for the business or looking to get a mortgage. 

The "threshold" as described is because of the introduction of the trading allowance a few years ago.