Subject to available reliefs, income from trading and property income is taxable at the individual’s marginal rate.
From April 2017, the government will introduce a new £1,000 allowance for property income and a £1,000 allowance for trading income. Individuals with property income or trading income below £1,000 will no longer need to declare or pay tax on that income. Those with income above the allowance will be able to calculate their taxable profit either by deducting their expenses in the normal way or by simply deducting the relevant allowance.
Further detail is awaited on how this new allowance will operate and interact with existing reliefs such as “rent a room” but it appears to be aimed at those who receive small amounts of income preventing them from having to file tax returns.