Draft Finance Bill 2017: Trading and Property Allowances
LITRG welcome the introduction of new trading and property income allowances of up to £1,000, both of which can be claimed by individuals from 6 April 2017. We consider these allowances will be helpful for low-earners who may be discouraged from earning a small amount of additional income because of their tax obligations or who are in-between ‘hobby-trading’ and starting a new self-employed business.
As these new allowances will be introduced very soon, we recommend that clear guidance is provided covering topics such as: who can use these new allowances; when business records need to be kept; making elections for partial relief; and when HMRC need to be informed about a new trading business or property income.
We also recommend that there is consideration of the impact that these changes will have on reporting income under universal credit, as claimants will still need to keep business records and report trading and property income to the Department for Work and Pensions even if the income is below £1,000. Very clear communications of the different rules for tax and benefits purposes will be essential.
The LITRG submission can be found here:
Claire Thackaberry