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New tax allowances for 2017/18

2018-04-11

If your annual gross property income is £1,000 or less, from one or more property businesses you won’t have to tell HM Revenue and Customs (HMRC) or declare this income on a tax return.

If your annual gross trading income is £1,000 or less, from one or more trades you may not have to tell HMRC, however there are circumstances when you must register for Self Assessment and declare your income on a tax return.  You must keep records of this income. 

If your annual gross trading or property income, from one or more trades or businesses is more than £1,000 you can use the tax-free allowances, instead of deducting any expenses or other allowances.

If you use the allowances you can deduct up to £1,000, but not more than the amount of your income. 

If your expenses are more than your income it may be beneficial to claim expenses instead of the allowances.

Gross income means the total amount you would put on your tax return before any allowances or expenses are taken off. This applies whether you use the cash basis or traditional accounting.

There may be circumstances where you choose to complete a tax return even if your income is £1,000 or less.

If you are at all unsure about these new rules then do give us a call! 

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