CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. ATT Warns On UK's 'Sharing Economy' Tax Concession

ATT Warns On UK's 'Sharing Economy' Tax Concession

by Jason Gorringe, Tax-News.com, London

28 December 2016


The Association of Taxation Technicians has warned the UK tax agency that taxpayers may unwittingly fall foul of UK tax rules after the introduction of a new concession for taxpayers with a business with very low turnover.

The UK Government recently published draft legislation in the 2017 Finance Bill for an allowance that businesses with trading or property business income that does not exceed GBP1,000 (USD1,260) will not be subject to tax on the profits from that business. The ATT said the legislation had provided clarity on what types of businesses would benefit from the allowance.

The ATT noted "the Budget announcement in March 2016 had linked the new allowance to the 'sharing economy,' creating uncertainty as to which types of business would qualify. [The draft legislation makes] it clear that the new allowances will apply to all types of property and trading income of an individual but not to partnership income."

According to the ATT, the new rules, applicable from the 2017/18 tax year, mean that where such annual income does exceed GBP1,000, the individual will have the option in calculating their taxable profits of either deducting all their actual business expenses (in the usual way) or of deducting the fixed allowance of GBP1,000 (regardless of their level of actual business expenditure). A separate GBP1,000 allowance will work in the same way for an individual's property business income, it said.

Under the draft legislation, individuals with income of less than GBP1,000 will not have to notify HMRC that they are making use of the allowance. The ATT fears that this could result in individuals unintentionally failing to notify HMRC if their annual income subsequently exceeds the allowance. The ATT has recommended that there could possibly be a simple notification process in order for an individual to qualify for the allowance.

"We think that it would be sensible to consider making entitlement to the allowance conditional on notification to HMRC that an individual wishes to use it," said Michael Steed, Co-chair of ATT's Technical Steering Group. "In that way, the individual would be far less likely to receive an enquiry from HMRC about their income from an apparently undeclared source of income and HMRC could safely disregard information about low levels of income received by someone who had notified their use of the allowance."

TAGS: individuals | tax | business | property tax | entrepreneurs | corporation tax | United Kingdom | legislation

To see today's news, click here.

Leave a comment

Read our Posting Guidelines

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »