Earn An Extra £1,000 pa with the Tax Free Trading Allowance
Published / Last Updated on 14/10/2024
Are you tight on income? Would an extra £1,000 pa income tax free help? Make use of the £1,000 Tax Free Trading Allowance.
Many people in the UK are not aware that they can earn an extra £1,000 pa tax free via self employed trade or services rendered.
£1,000 pa Tax Free Trade Allowance
Provided this income/revenue is casual and miscellaneous income and you do not claim or offset other expenses or allowances against this income, it can be tax free.
If you do offet expenses against this casual and miscellaneous income then it is not tax free and the income may be subject to income taxes and national insurance contributions.
Completing your Self Assessment Tax Return
- Select “Yes” to add a “self employment/self employed income.
- Scroll down and select “ No” to income more than £85,000.
- Scroll down and select “Yes” to Turnover of £1,000 or less.
How Many Self Employments?
You can have a many self employment roles as you wish. Simply add more self employment roles.
Is it £1,000 for each Self Employment?
No, you can have two, three or more ‘self employment’ incomes/turnover included in your Tax Free Trade Allowance, but combined, they must not exceed £1,000 turnover in total.
For example:
- You may be self employed as an electrician earning £50,000 pa. This will be subject to taxes and national insurance contributions (NIC) as normal.
- You may also do some gardening for a friend at £30 pm. That’s an extra self employed income of £360 pa that may be included in the Tax Free Trade Allowance.
- You may also do some online trading via Ebay, Amazon or Etsy as a self employed ‘wooden animal carver’. Provided your turnover from this is £640 or less, this can also be included in your Tax Free Trade Allowance.
- You file your self employment with 3 X Self Employments
- Electrician £50,000
- Gardener £360
- Wood Carver £640
- £50,000 income is taxable/NIC and £1,000 (gardener/wood carver) is tax/NIC free under Tax Free Trade Allowance.
This is the same for employees: File your tax return as an employee but add/complete the separate Self Employed section.
