HMRC to increase trading allowance to £3000

Purple_Jumper

According to ICAEW Insights

“HMRC has announced that the income tax self assessment (ITSA) reporting threshold for trading income will be increased from £1,000 to £3,000 within this parliament.

The trading income reporting threshold is one of the criteria for determining if a person is required to submit a tax return. It is different from the trading allowance of £1,000. ICAEW understands that the trading allowance will remain at £1,000.  “

I guess we will have to wait and see.......

RFW

Purple_Jumper said:

According to ICAEW Insights

“HMRC has announced that the income tax self assessment (ITSA) reporting threshold for trading income will be increased from £1,000 to £3,000 within this parliament.

The trading income reporting threshold is one of the criteria for determining if a person is required to submit a tax return. It is different from the trading allowance of £1,000. ICAEW understands that the trading allowance will remain at £1,000.  “

I guess we will have to wait and see.......

They could try and make it a bit more confusing. It doesn't apply to me so I don't have to bother but if I'm looking at that I think that someone will have to register if they turn over more than £1000 but don't start paying on anything until it reaches £3000? 

That's just for business sales to avoid anyone dipping in and worrying about other things!

Spoonie_Turtle

RFW said:

Purple_Jumper said:

According to ICAEW Insights

“HMRC has announced that the income tax self assessment (ITSA) reporting threshold for trading income will be increased from £1,000 to £3,000 within this parliament.

The trading income reporting threshold is one of the criteria for determining if a person is required to submit a tax return. It is different from the trading allowance of £1,000. ICAEW understands that the trading allowance will remain at £1,000.  “

I guess we will have to wait and see.......

They could try and make it a bit more confusing. It doesn't apply to me so I don't have to bother but if I'm looking at that I think that someone will have to register if they turn over more than £1000 but don't start paying on anything until it reaches £3000? 

That's just for business sales to avoid anyone dipping in and worrying about other things!

Other way round.  From the gov.uk page £3,000 will be the threshold for registering for self-assessment.  The trading allowance - as far as we know yet - will still be £1,000.

It says others will pay anything they owe via a 'simple online system' - I don't know how self-assessment works so I don't know what counts as 'simple' but let's say they use their online government account (which many of us have for things like checking pension forecast/NI record, not related to self-assessment), declare their trading income that's between £1,000 and £3,000.  Joined up to info HMRC holds on their income for that completed tax year, if they have used up their personal allowance (or the trading income takes them above it) and need to pay tax on whatever they earned above the £1,000 trading allowance, done through that system rather than having to fill in the self-assessment form.

^ all just speculation of course, and could be based on faulty naïve assumptions.  It was just that line on the gov.uk page about a "new simple online service" distinct from full-on self-assessment.

MSE_Molly_G

Hi all. We've published a news story with all that we know so far on this: Got a side hustle? Your tax rules might be changing – here's what we know so far.

RFW

MSE_Molly_G said:

Hi all. We've published a news story with all that we know so far on this: Got a side hustle? Your tax rules might be changing – here's what we know so far.

If you make £1,000 or less, you won't need to declare your income or pay tax on this. This is the case now, and it's not changing – see below for how the current rules work.

That should be gross income, not what 'you make'.

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

RFW

Spoonie_Turtle said:

^ all just speculation of course, and could be based on faulty naïve assumptions.  It was just that line on the gov.uk page about a "new simple online service" distinct from full-on self-assessment.

Thanks. Given there's no sign of legislation yet then it is just speculation.

the_lunatic_is_in_my_head

MSE_Molly_G said:

Hi all. We've published a news story with all that we know so far on this: Got a side hustle? Your tax rules might be changing – here's what we know so far.

Looks like I stand corrected, bit odd to go to so much trouble for a small selection of people, unless they are looking to expand this and simplify other areas of self assessment in the future. 

soolin

RFW said:

MSE_Molly_G said:

Hi all. We've published a news story with all that we know so far on this: Got a side hustle? Your tax rules might be changing – here's what we know so far.

If you make £1,000 or less, you won't need to declare your income or pay tax on this. This is the case now, and it's not changing – see below for how the current rules work.

That should be gross income, not what 'you make'.

https://www.gov.uk/guidance/tax-free-allowances-on-property-and-trading-income

This is why I’m nervous about any new or additional reporting system. Currently there is one set of rules and it is mostly automated. Where applicable , people are required to do a self assessment form which is submitted and almost certainly computer checked with a percentage pulled out for manual checks. 

If, and I agree this is pure speculation, a new reporting system just for people with side hustles within a certain price point is introduced it’s going to cause real confusion. The very fact that even the MSE wording of ‘what you make’ is misleading and different terms being used to explain the limit is likely to result in a vast amount of enquiries to HMRC which could make this new system cost money rather than make money. I tend to use the word gross takings, but have realised that is not always understood , so not sure what terminology to use that best explains the figures in a layman’s terms. 

We must all just wait and see, and worry about all the misinterpretations both within the press and the various groups, later. This just adds another layer of confusion where even the question of whether private sales are taxable or not, and whether making soaps/candles/jewellery etc is a business or the urban myth of a non taxable hobby business is still being discussed on a daily basis in many forums. 

TimeLord1

Again they're releasing the guidance and it isn't official. Timescale is possibly 4 years time.


"Within this parliament – or by the end of 2029 – the threshold for filing a Self Assessment tax return for trading income will rise from £1,000 to £3,000"


How many people will read this and believe it's now law by the various articles. The Government has announced nothing until it becomes lawful.

RFW

TimeLord1 said:

Again they're releasing the guidance and it isn't official. Timescale is possibly 4 years time.


"Within this parliament – or by the end of 2029 – the threshold for filing a Self Assessment tax return for trading income will rise from £1,000 to £3,000"


How many people will read this and believe it's now law by the various articles. The Government has announced nothing until it becomes lawful.

Odd isn't it? When they ever announce VAT threshold increases they're usually in the Budget and in place quite quickly.

As no one is asking my opinion I'll give it! I think they should raise it higher and encourage and assist those micro traders to grow. At the same time I'd increase fines for those who don't declare. There's a lot of misinformation and few guides for anyone starting out.