There were two tax breaks that were supposed to be introduced in April 2017, both of which are designed to help micro entrepreneurs. But it seems that the government has taken out the proposal from the Finance Bill.
The proposal was that sellers of goods and services on online platforms, such as Airbnb and eBay, would be entitled to an annual tax allowance of £1,000, which is a combination of allowance applied to digital trading and allowance applied to property. But it never got written into law when the government rushed to finish the Finance Bill ahead of the June 8 election.
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This means millions of sellers in eBay, Etsy, and other online platforms will no longer be entitled to the £1,000 tax allowance. The same is true for Airbnb hosts.
For now, Airbnb hosts can still claim rent-a-room relief under the rent-a-room scheme, but this could all change, what with a paragraph buried in the Budget Document suggesting a removal of the rent-a-room tax break for short-term rentals. When this happens, those earning an average of £2,000 through Airbnb could be hit with an £800 tax bill.
The annual tax break for micro-entrepreneurs wasn’t the only one dropped from the Financial Bill. Some of the measures that didn’t make the cut include:
• A reduced dividend allowance of £2000 from the current £5000.
• Implementation of the money purchase annual allowance for people who’ve already withdrawn their pension, but plans to continue contributing more in the future. Changes in the pension will come, the Government said. Just not yet.
• Measures to track down individuals who have been living in the UK for a long time but are domiciled elsewhere.