Income Tax (Trading and Other Income) Act 2005 section 783A

Relief under this Chapter

Section 783A provides an overview of the trading allowance, explaining the types of relief available to individuals on their trading and miscellaneous income and the circumstances in which that relief may or may not apply.

• The trading allowance gives individuals relief on income from a relevant trade and on miscellaneous income.
• Where an individual qualifies for full relief, their relevant income is completely exempt from income tax.
• Where an individual qualifies for partial relief only, their relevant income is calculated using alternative methods, effectively allowing a deduction in place of actual expenses.
• Certain exclusions apply which can prevent relief from being given, for example where expenses have already been deducted from rent-a-room receipts or where payments are made by a close company.