In today’s budget there were two new allowances proposed to deal with people who have very small amounts of income from business.
In the past you would have to prepare accounts to deal with these, and the admin costs and time could result in quite a dent in your profits.
However, from April 2017 it is proposed that there will be two allowances available so that income below these levels does not need to be reported to HMRC and there will be no tax liability:
£1,000 for occasional income such as sharing equipment or selling goods.
£1,000 for property related income such as driveway rent.
An additional point that is welcome is that people who have income above the allowance can just deduct a flat £1,000 and declare the difference to be taxed – rather than having to calculate and deduct all their expenses.
For people with very small businesses, this is a welcome change and could lead to more businesses starting. As their business grows then they can move on to preparing full accounts so that they benefit from greater expense deductions available.
