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Information about the Trading/Property allowance

HMRC have published information on their website surrounding their new tax allowance. 

This new allowance starting from 2017/18 tax year, effectively means that if your income (before expenses) is less than the £1,000 value, you will no longer have to declare or pay tax on this income.  

If your income is over the threshold, it means that individuals will now be able to complete one of two actions for calculating your taxable profits:

  1. Deduct the allowance from your receipts, instead of deducting the actual allowable expenses. The trading allowance will also apply for Class 4 National Insurance contribution purposes.
  2. If your allowable expenses are higher than the allowance, you would continue to claim these to reduce your profits overall and effectively the allowance is lost.

In order to input this into the software, you need to locate the page in the software for trade/property. The HMRC Forms locations have been included below for reference:

  • Property: UK Property > Page 1 > Box 5.1 or Page 2 > Box 20.1
  • Trade: Self employment > Short Form - Page 1 Box 10.1 Full form - Page 1 Box 16.1
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