B2.113 Trading allowance
From 2017/18 an annual trading allowance of £1,000 applies to certain individuals1. It does not apply to companies. The government's aim is to simplify the income tax obligations for those who earn small amounts of income from occasional jobs, for example selling goods they have made. Where full relief applies, the income is not charged to income tax and it does not have to be declared.
Receipts from a relevant trade or miscellaneous income
The allowance applies to receipts from a 'relevant trade' (including a profession or vocation) or 'miscellaneous income'.
A relevant trade is one which is not carried on in partnership, and not one in which all the receipts for the tax year are rent-a-room receipts which qualify for rent-a-room relief (see B6.601)2. However, there are some circumstances in which a profit generated from running a property business may be taxed under the trading income rules and consequently the trading allowance can be used against this income3.
The receipts from the relevant trade are those brought into account under generally accepted accounting practice (GAAP, see B2.102) or the cash basis, where a cash basis election has been made (see B2.112)4. Consequently, adjustment income and post-cessation receipts for example, are
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