Do you qualify for the trading & property tax reliefs worth £2,000?

We’re now seeing the effects of the new trading and property tax reliefs filtering through in the 2017/18 self-assessment tax returns.

You may be aware that from 6 April 2017, HMRC introduced these allowances for individuals to offset against small amounts of income earned through certain activities.

Each allowance is worth up to £1,000 and the good news is that if you carry on both qualifying trading and property activities, you can claim both allowances.

The trading allowance can be claimed against income earned on:

  • Self-employment
  • Casual services (‘odd-jobs’ or services such as babysitting and gardening)
  • Hiring out personal equipment (loaning someone your power tools for example)

The property allowance can be claimed against income earned from a property business and covers rental income. If your yearly property income is less than £1,000, you won’t need to tell HMRC about it. However, you may wish for other reasons to declare it. For example, your expenses might be greater than your income and you wish to recognise the loss. We can advise you on this area and the various tax consequences.

Note that if your property income is above £1,000, you’ll need to contact HMRC and if it’s above £2,500, you’ll need to complete a self-assessment tax return.

You won’t be able to use the property allowance if you breach certain conditions such as you receive property income from a company you control or you claim expenses instead of using the Rent a Room Relief.

Maintaining and keeping records

If you’re planning on claiming the trading and property tax reliefs, you’ll need to keep adequate records so you can prove your income and expenses. These include invoices, (electronic or hard copies), income receipts and bank statements.

To discuss how you could take advantage of these allowances, please contact [email protected] or call 01527 558539.

For more information on our services, please take a look at our website.

trading and property tax reliefs

Further information is available on the HMRC website.