ÀÏ˾»úÎçÒ¹¸£Àû

Trading allowance


Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
tag-icon Tax Returns

Trading allowance


Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
tag-icon Tax Returns
imgtext

This guidance note looks at how the trading allowance of £1,000 which provides an income tax and class 4 National Insurance exemption for up to £1,000 of trading income each tax year. There is a comparable property allowance which is set out in the Property allowance guidance note.

Trading allowance ― the basics

The trading allowance is an exemption for individuals with £1,000 from income tax and Class 4 NIC on trading income and it also covers miscellaneous income from the provision of assets or services. The trading allowance is not available for companies.

The trading allowance and property allowance are mutually exclusive. Therefore, it is possible for the individual to have £1,000 of gross trading receipts (which must include miscellaneous receipts) and £1,000 of gross property receipts, and the entire £2,000 would be exempt from income tax.

The trading allowance is set at £1,000 and can only be amended by secondary legislation, meaning it is unlikely that the level of the allowance will be up-rated annually. As such, the value of the allowance is likely to be eroded over

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, and tax research, register for a free trial of Tolley+â„¢
TAKE A FREE TRIAL NOW
Powered by
  • 03 Feb 2025 06:26

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Calculating trading profit and loss

Popular Articles

Owner-Managed Businesses

Wholly and exclusively

Wholly and exclusivelyFor both income tax and corporation tax purposes, one of the fundamental conditions that must be satisfied for an item of expenditure to be deductible, is that it must incurred ‘wholly and exclusively’ for the purposes of the trade, profession or vocation. References to CTA

14 Jul 2020 14:00 | Produced by Tolley Read more Read more
Personal Tax

Foreign self-employment

Foreign self-employmentTrading in another jurisdiction involves many issues, only some of which involve taxation. Advice should be taken, not only in relation to tax but on the wider business implications. For an overview of the points to consider for certain jurisdictions see Tolley's Global

14 Jul 2020 11:44 | Produced by Tolley Read more Read more
Employment Tax

Parking provision and expenses

Parking provision and expensesCar parking facilities at or near to the employee’s workplaceThere is an exemption from tax and NIC where an employer provides parking, or pays for or reimburses an employee for the costs associated with car parking at or near the place of work; there are no reporting

14 Jul 2020 11:09 | Produced by Tolley Read more Read more