01785 243276 admin@howardsca.co.uk

After the expense of Christmas many people look for ways to stretch their budgets. In the current climate especially, every penny counts. Did you know you can earn up to £2000 tax free each year?

Gross allowances

Basically, HM Revenue & Customs (HMRC) provides two gross allowances of £1,000 per annum. Income can be from another source of work or property rental.

 

Trade allowance

In general, the trade allowance relates to casual services. For example, you could walk your neighbour’s dog or do some gardening. Maybe you could hire out power tools.

 

Property allowance

Live close to an airport or stadium? Then make use of your drive. Why not offer paid parking to holidaymakers, sports fans or concert goers. Landowners could rent fields to people with horses.

 

Perhaps, during local events, you choose to avoid the crowds. Are you on holiday when test cricket comes to town? Make the most of these situations. Whilst you’re away, rent your property to someone attending the event. All of this adds up to you be able to earn up to £2000 tax free each year.

 

Keep records

Although you don’t have to declare income below the £2,000 threshold, you must keep records. Document the amount and how and when you earned it. Be aware you cannot claim expenses against this income.

 

Companies and partnerships

Furthermore, you can’t claim the allowances if you earn income from a company controlled by you or an associate. This rule applies if you or someone connected to you are partners. Equally, the allowances are unavailable if you have trade or property income from your employer or your spouse or civil partner’s employer.

 

Selling possessions to earn up to £2000 tax free each year

Some people sell bric-a-brac and unwanted gifts at car boot sales or through online trading sites. This kind of activity falls outside the scope of the allowances. HMRC doesn’t view this as trading income. As such, sales are not subject to tax. So, you don’t need to inform the tax man. That said, for significant sales we recommend seeking advice. You could discover that Capital Gains Tax applies.

 

Looking to generate some extra cash? Maximise both allowances and earn up to £2000 tax free. For advice, call us now on 01785 243276.

 

Read more income boosting tips here.

Find out more answers to your pressing questions here.