Where did that come from? Unexpected income and what to do with it

/ Tax

Author: Henry Ejdelbaum

Tags: Accountants, accounting, business, hmrc, income, property, property allowance, Tax

Sometimes you may, unexpectedly, find yourself with untaxed income. You could’ve done some extra work on the side, or you’ve rented out your property for a week in the summer (quite common if you live in Wimbledon) while you’re on holiday.

But what to do with the undeclared income?

The usual route would be to put this on your self-assessment return. Easy? Not so for all. What do you do if you’re employed and don’t file one? Could you get in trouble? Quite probably but fear no more!

The 2017/18 tax year saw two allowances introduced. The property allowance and trading allowance removed reporting obligations for those with low levels of second income. Each comes in at £1000 and they are mutually exclusive. It ensures those who are accidentally non-compliant may no longer face penalties for their situation.

The property allowance is ideal for those using Airbnb or others to let their property in the short term. But do be careful, you really should get some advice as, with anything HMRC introduce, there are a lot of exclusions. If you’re unsure how the allowance could help your tax position, you should get in touch with an accountant. Preferably one who likes tax.

Find your local AIMS Accountant today.