As is normal rumours are flying around concerning this weeks Budget to be delivered by George Osborne, Chancellor of the Exchequer on Wednesday this week.
What’s pretty certain is that there are cuts to come, but one rumour peeked my interest. Geroge Osborne may be about to legitimise many micro traders who haven’t declared themselves as businesses and moving forward may not have to.
According to (that most reliable of sources!) The Sun, there may be an exemption for small traders to make £1000 profit a year from online selling without declaring it. This would mean that casual traders on eBay, Etsy and other marketplaces could start their businesses and not have to worry about declaring a bit of pin money without living in fear of the tax man coming a calling.
There may be an additional £1000 exemption for those using services such as AirBNB to rent out rooms in their homes or JustPark to rent your parking spot, giving a total allowance of £2000 earnings from Internet activities before incurring a tax liability.
It’s certainly an interesting concept, on the one hand there are so many people renting their spare room or making money on eBay that we know a ton of tax isn’t being paid. It makes sense to legitimise these traders (who are probably in all other aspects of their life law abiding citizens), but equally it give the tax man carte blanche to go after those traders flouting the law, making significant profits and not declaring a bean.
We’ll be watching the Budget news with interest to see if this was just a rumour or if a small pin money business will be allowed to operate tax free under certain thresholds.