Micro-trader Tax Breaks

Micro-traders are to benefit from new tax breaks!

With effect from 6th April 2017, two new allowances will come into effect thanks to the rise in eBay trading and Airbnb.

To try and remove some of the confusion that surrounds when a ‘hobby’ becomes a trade the government have announced two £1,000 allowances to be known as:

• Micro Entrepreneurs Allowance and

• Property Allowance

So how will this work?

Well, any individual who receives gross income of less than £1,000 a year from a small trade or land and property will no longer be required to tell HMRC and will not need to register for a self-assessment tax return. Alternatively, if their income exceeds £1,000, then they can opt to make a deduction from gross earnings of £1,000 and report no expenses, this is particularly useful for a micro trader with limited expenses.
These new reliefs were created with the online trader in mind but of course, may benefit many small traders from cake decorators to dog walkers.