Some news from the Budget that I only just noticed. From next tax year April 2027-April 2028 the trading allowance and trading income reporting threshold are both increased from £1,000 to £3,000. This has some positive implications for refs:
- No need to declare anything to HMRC if gross trading income is less than £3,000.
- Anyone going over £3,000 still has to declare it but can deduct the full allowance from the taxable income, even when actual expenses are less than that (e.g. if trading income is £4k then a maximum of £1k is subject to income tax).
- I believe this change will mean a ref with trading income £3k or higher will pay £400 less in income tax if they are a basic rate taxpayer, or £800 less if they are a higher rate taxpayer.
