Saying that this was a Budget ‘for the digital age’, Chancellor George Osborne has announced new tax reliefs for individuals using online services such as eBay and Airbnb to earn income in the fast-growing sharing economy
Osborne said there would be two new tax-free allowances, each of £1,000, one for selling goods or providing services, and one for income from property.
The new measure is set to cost the Exchequer an estimated £645m over the next five years until 2020-21.
The rapid growth of the digital and sharing economy means it is becoming easier for more and more people to become ‘micro-entrepreneurs’. However, for those making only small amounts of income from trading or property, the current tax rules can seem daunting or complex with a high likelihood of falling foul of current tax rules.
To help make the tax position more certain and simple for these individuals, the new tax reliefs come into force from April 2017 covering property and trading income.
People who make up to £1,000 from occasional jobs – such as sharing power tools, providing a lift share or selling goods they have made via online platforms – will no longer need to pay tax on that income.
In the same way, the first £1,000 of income from property – such as renting a driveway or loft storage – will be tax free.
