188体育

Jumail has employment income from his full time job, but on weekends also provides dog walking service to the residents of a nearby apartment block earning 拢15 per week. Jumail incurs expenses on dog treats, 拢200, and advertising flyers, 拢100.

Jumail鈥檚 relevant trade is that of being a dog walker. Jumail has no other trades or miscellaneous income.

Jumail鈥檚 relevant income for the year is 拢780 (calculated as 拢15x52weeks). Jumail鈥檚 expenses total 拢300 (treats 拢200 + advertising 拢100) which means that Jumail鈥檚 trade is a profitable trade as his income exceeds his expenses.

As Jumail鈥檚 gross income is no more than the 拢1,000 allowance, Jumail qualifies for full relief and the profits or losses of his trade are treated as nil. Jumail does not have to complete a self-assessment return in relation to this income.

Jumail automatically qualifies and does not have to make any election to claim full relief.

In this instance it is beneficial for Jumail to use the allowance as it means he does not have to pay tax on his profits nor does he have to complete a self-assessment return. If Jumail did not qualify for the allowance he would pay tax on 拢480 of profit (拢780 gross income less 拢300 allowable expenses).

Jumail cannot deduct the full 拢1,000 allowance from his income of 拢780 to create a 拢220 loss as individuals cannot use the trading allowance to create losses.