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Since 6 April 2017 you haven’t had to report income from trading or rents (property income) if the total amount received in each category is less than £1,000 per tax year, but there are conditions.

The property income allowance can’t apply to rent from letting a room in your own home to a lodger. This source of rent falls under a different allowance called rent-a-room relief, which covers up to £7,500 of rent per year. The property income allowance is designed to cover letting of non-residential areas, such as your driveway.

If your property or trading income is more than £1,000 you can elect to be taxed on the excess above £1,000, ignoring any expenses. Alternatively, you may elect for the allowance not to apply and deduct all allowable expenses, so you are taxed on the net profit or loss. This is the better option if you have lots of expenses and have made a loss.

Neither allowance can be set against income from a private company in which you or your close family holds shares, or from a partnership in which you are a partner or are connected with one of the partners.

By |2018-07-31T09:32:02+01:00July 31st, 2018|News|