There is no tax to pay on trading income or earnings from land and property as long as the income from each source does not exceed £1,000.

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.
• hiring personal equipment, for example, power tools.

This allowance does not apply to trading income from a partnership.

Property allowance

The property allowance is a tax exemption of up to £1,000 a year for individuals with income from land or property.

If you own a property jointly with others, you are each eligible for the £1,000 allowance against your share of the gross rental income.

If you have two businesses and claim the property allowance in one business, you may not claim actual expenses in respect of the other business.

You cannot use this allowance on income from letting a room in your own home under the Rent a Room Scheme.

To keep your earnings in sync with increases in prices is becoming progressively difficult. Most individuals – whether employed or self-employed – would find it unrealistic to secure pay rises (if employed) or price increases (if in business) unless the demand for their goods or services was high.

If most taxpayers cannot match price increases by keep earnings in sync with these increases, then their purchasing power will gradually reduce.

This autumn, cost pressures are likely to continue, particularly utility costs. And will force many of us re-examine our budgets and try to figure out how to balance our books without meeting excess expenditure by maxing-out credit cards or entering into expensive loans.

One solution may be to investigate creating additional income streams. For example:

• Turn a hobby into a part-time business.
• Rent out your driveway as a day-time parking area.
• Rent a spare room in your house.

There are tax concessions that may make these activities tax-free. See the “£2,000 tax-free income” and “Rent-a-room” articles in this newsletter.

You could also search for ideas and assistance online. HM Government Money and Pensions Service has launched a Money Helper website at https://moneyhelper.org.uk.

Under present legislation any transfer of assets between couples who are separating, or divorcing are free of any Capital Gains Tax (CGT) liability as long as the assets are transferred during the year of separation/divorce.

This places undue pressure on couples to complete these transfers in time to qualify for the CGT exemption. Based on recommendations from the Office for Tax Simplification, the Finance Bill 2022-23 aims to correct this by enacting the following changes:

• separating spouses or civil partners be given up to three years after the year they cease to live together in which to make no gain or no loss transfers.
• no gain or no loss treatment will also apply to assets that separating spouses or civil partners transfer between themselves as part of a formal divorce agreement.
• a spouse or civil partner who retains an interest in the former matrimonial home to be given an option to claim Private Residence Relief (PRR) when it is sold.
• individuals who have transferred their interest in the former matrimonial home to their ex-spouse or civil partner and are entitled to receive a percentage of the proceeds when that home is eventually sold, be able to apply the same tax treatment to those proceeds when received that applied when they transferred their original interest in the home to their ex-spouse or civil partner.

If these changes are confirmed, they will apply to disposals that occur on or after 6 April 2023.

Ukraine has been offered a helping hand by the UK Government to rebuild its economy in the wake of the Russian invasion.

Talks between the two nations have led to plans to pursue a new digital trade agreement to help Ukrainian businesses trade more effectively with the UK.

International Trade Secretary Anne-Marie Trevelyan met officials from the Ukrainian government to reiterate the UK’s unwavering support for Ukraine.

The digital trade agreement will aim to support Ukrainian businesses by cutting red tape and helping them to trade with the UK more efficiently through technology such as electronic transactions, e-signatures, and e-contracts.

‘Shoulder to shoulder’

It will also make it easier for UK companies to work with Ukrainian businesses and support with their economic recovery. Total trade between the UK and Ukraine was worth £1.9 billion in 2021 and UK exports of digitally delivered services accounted for 73 per cent of all UK services exports to Ukraine in 2020.

Anne-Marie Trevelyan said: “Putin’s brutal and unprovoked invasion of Ukraine has had devastating human consequences. The UK stands shoulder to shoulder with Ukraine and will use trade as a force for good to help the country rebuild its modern economy after this barbaric war.

“Our partnership with Ukraine will help them seize the brighter days ahead, and we will continue to do everything in our power to protect Ukrainian jobs, livelihoods and families.”

Vadym Prystaiko, Ambassador of Ukraine to the United Kingdom said: “The United Kingdom has shown unwavering support throughout this illegal invasion and the ties between our governments have never been closer.

UK is global leader

“While we fight fearlessly for the freedom of our nation, many Ukrainians also look ahead to how we will rebuild our country. Strengthening our economic ties through this landmark digital trade agreement will support our IT industry, which is set to become a major driver of economic growth for our businesses and cities.”

The announcement follows a direct request from President Zelenskyy’s government, which has identified supporting the digital economy as one of its areas of focus for the recovery and reconstruction of the country. The UK, as a global leader in digital trade, is well placed to help with that.

It follows the UK’s removal of all tariffs under the existing UK-Ukraine free trade agreement in May, supporting Ukrainian businesses and producers to export goods and rebuild their economy. A new digital trade agreement would further strengthen our trading relationship, providing additional and much-needed economic support for businesses in Ukraine.