Using £1000 Traders Allowance to reduce my tax bill?

Using £1000 Traders Allowance to reduce my tax bill?

13:00 PM, 1st August 2019, About 3 years ago 2

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My two sons look after my properties whilst I am on holiday. If I make a payment to each of them of £1000 each for this service can I declare this as an expense on my tax return?

In addition can they take the money and not declare it under the trader’s allowance?

“Trading allowance

The trading allowance is a tax exemption of up to £1,000 a year for individuals with trading income from:

  • Self-employment
  • Casual services, for example, babysitting or gardening (helpsheet 325 has more information about other taxable income)
  • Hiring personal equipment, for example, power tools

If your annual gross income from these is £1,000 or less, you do not need to tell HMRC”

As ever I am looking to reduce my tax burden, any thoughts on this would be appreciated. My tax rate on all profits is 41% so every little helps.



Neil Patterson View Profile

15:53 PM, 1st August 2019, About 3 years ago

Hi Jim,

Definitely seek advice from your accountant first as if they can't invoice you for an actual job or trade or produce receipts for a cost this may be a very hard sell to HMRC.

Jessie Jones View Profile

9:15 AM, 4th August 2019, About 3 years ago

This seems to me to be a very good idea, but to justify the payments they may need to be for work of value. Staying at home playing on their Xbox whilst manning a phone line would probably not be sufficient.
Next time you have some painting and decorating to do, or garden clearance, they could earn their £1000 that way, then still man the phone line whilst you are on holiday. HMRC would be much more understanding of such a tangible trade.

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