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David McManus

David McManus

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Personal Tax Manager

Friday 30th Aug, 2019

Are there any of the following allowances for small earnings that you could be taking advantage of?

  1. The personal savings allowance:

    If you are a basic rate taxpayer, you can get up to £1,000 of interest tax free (this reduces to £500 for a higher rate taxpayer).

    You may also be eligible for the £5,000 of interest tax free (the starting rate for savings) depending on your other income.

  2. The trading allowance:

    If your total income from all trades in the tax year is no more than £1,000 you will automatically qualify for this allowance so no tax will be payable on this. This includes trading income from self-employment or casual services, (e.g. babysitting or gardening).

  3. The property income allowance:

    If your total income from all property businesses in the tax year is no more than £1,000 you will automatically qualify for this allowance so no tax will be payable on this.

If you jointly own a property you would each be eligible for the allowance against your share of the gross income.

You cannot however use this allowance on income from letting a room in your own home under the Rent a Room Scheme.

Related Article - HMRC targets overseas-based UK landlords

As part of its long running Let Property Campaign, HMRC have contacted a large number of UK landlords to suggest they have not paid all the tax they owe and encourage them to volunteer their rental property income.

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Are there any of the following allowances for small earnings that you could be taking advantage of?

  1. The personal savings allowance:
    If you are a basic rate taxpayer, you can get up to £1,000 of interest tax free (this reduces to £500 for a higher rate taxpayer).
    You may also be eligible for the £5,000 of interest tax free (the starting rate for savings) depending on your other income.

  2. The trading allowance:
    If your total income from all trades in the tax year is no more than £1,000 you will automatically qualify for this allowance so no tax will be payable on this. This includes trading income from self-employment or casual services, (e.g. babysitting or gardening).

  3. The property income allowance:
    If your total income from all property businesses in the tax year is no more than £1,000 you will automatically qualify for this allowance so no tax will be payable on this.

If you jointly own a property you would each be eligible for the allowance against your share of the gross income.

You cannot however use this allowance on income from letting a room in your own home under the Rent a Room Scheme.

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