Is the £1000 trading allowance in place

africalass · 19 June 2018 at 1:27PM

Hi!

I have been looking this up for a friend and am finding contradictory information. They are doing some freelance secretarial work and should have an annual income below £1000. They do not have any other self-employment.

I heard about the trading allowance allowing for services with an income below £1000. But then I've seen on this site that it's not in place. Does anyone know for sure whether it is or not? Here are the two main links that are confusing me:
https://www.moneysavingexpert.com/news/protect/2017/04/government-drops-1000-tax-breaks-for-online-sellers-and-room-renters-for-now

https://www.gov.uk/government/publications/income-tax-new-tax-allowance-for-property-and-trading-income/income-tax-new-tax-allowance-for-property-and-trading-income

thanks for any help!

Curveygirl · 19 June 2018 at 2:47PM

Not sure if I've understood you correctly.
The 2nd link doesn't appear to be anything to do with secretarial work, but also, none of it is relevant if your friend has an income of £1k with no other income.
Or have I missed the point?

africalass · 19 June 2018 at 2:55PM

Thanks Curveygirl. The second link talks about an introduction of two new trading allowances. One for property (which is irrelevant here) and one for trade (which is what I'm looking into). In terms of their definition of trade it says, "The government announced at Autumn Statement 2016 that the trading allowance will also apply to certain miscellaneous income from providing assets or services. This change will reduce the complexity for some individuals who will no longer have to decide if the activity amounts to a trade or not."

As she is providing services (in this case secretarial) on a freelance basis and should have less £1000 for the year, then this should mean that she wouldn't need to declare or pay tax on this due to the brand new allowance.

However, the MSE link says that this has been 'quietly axed' - which would mean she would need to register for self-assessment etc. as in previous years. But if it's been axed, then I'm trying to work out why it's still on the government pages. Or maybe it was axed and then reintroduced - but I haven't been able to find info on this.

I thought maybe other people boosting their income with smaller income in such ways may have already investigated this new allowance and know whether it definitely exists.

Thanks!

Curveygirl · 19 June 2018 at 3:04PM

Well the article is over a year old, where as the Tax Office Page was updated only a few weeks ago

Mrs_Soup · 19 June 2018 at 3:33PM

I believe it was proposed, then dropped and then introduced fairly quietly.

However is this the only income your friend has or is she doing the secretarial work as a top up to anther income stream/job on which she does already pay tax.

africalass · 19 June 2018 at 4:04PM

Thanks for this both of you. I think she maybe has a part-time job already in a shop. But no other self-employment. From what I can read of the new allowance it didn't seem to be impacted by employment and was in addition to the personal allowance. Is that how you read it too?

Merlin's_Beard · 19 June 2018 at 6:01PM

It's money from anything that's not your main employment. So it excludes overtime, and it excludes anyone who is only earning a tiny bit from their "main job".

But anything earn from sideline jobs doesn't have to be declared.

It was going to be introduced in early 2017, as part of the Spring Budget, with big fanfare. But the Government decided to muck up and self-implode with an election instead. And then they quietly introduced it in Autumn 2017, but they couldn't make a big deal of "hey we're having another go at this because we failed last time" so there were no announcements at all. So most of what you find is from the big fanfare-y announcement in early 2017 with the bells and the whistles and the headlines.

africalass · 19 June 2018 at 6:33PM

Thanks - that helps explain the timeline.
Think that will be good news for her - it seemed silly to be having to go through all the self-assessment when it was unlikely to ever get to the point she'd have to pay tax, so seems like a good move.
Thanks.

bit_by_bit · 19 June 2018 at 11:07PM

Thanks for asking that question africalass. I was looking for that a few weeks ago and couldn't work it out.
Thanks Merlin's Beard for that clear and concise explanation.

ElefantEd · 20 June 2018 at 9:22AM

I just filled in my tax return online, and the £1000 trading allowance and £1000 property allowance were both included.

burnoutbabe · 8 July 2018 at 6:24PM

yep, i was quite confused why i didn't have to complete my mystery shopping income, having ticked the box saying under £1k at the start (i assumed it was the usual one just splitting it into declaring total only or full turnover and costs)

£1000 property income as well! hurrah

Is the £1000 trading allowance in place

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