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This publication is available at https://www.gov.uk/government/publications/other-taxable-income-hs325-self-assessment-helpsheet/hs325-other-taxable-income-2018
This helpsheet gives you information to help you work out the figures to include in:
- boxes 17 and 18 of the ‘Other UK income’ section on page TR 3 of your tax return
- boxes 1 and 2 of the ‘Other information’ section on page Ai 3 of the Additional information pages
- boxes 3 to 10 of the ‘Employment lump sums, compensation and deductions, certain post-employment income’ section on page Ai 2 of the Additional information pages
Other taxable income
The Tax Return Guide lists 8 examples of ‘other taxable income’ which you should include in the relevant boxes and provides guidance on expenses which can be allowed in arriving at the amount of other taxable income. This includes miscellaneous income from casual earnings, commission and freelance income that’s not from employment or self-employment. From 6 April 2017 receipts from self-employment and miscellaneous income of £1,000 or less are exempt from tax and don’t need to be reported on a tax return. Individuals with total receipts of more than £1,000 can elect to calculate their taxable miscellaneous income by deducting the allowance of up to £1,000 instead of those expenses that had to be spent to earn this income. If, however you’ve already claimed part or all of your £1,000 trading income allowance against self-employed income then it’s the unused amount, if any, that can be deducted to determine the taxable miscellaneous income.
For more information on:
You’ll need to record the amount of income and expenses for each type of income separately, for example, you may have more than one source of casual earnings but the income from those various sources is of the same type. If you claimed the trading income allowance against self-employment income or miscellaneous income, any amounts you had to spend to earn the miscellaneous income isn’t deductible. So you can’t generate a loss.
Contact HM Revenue and Customs (HMRC) or your tax adviser if you’re not sure about what to include or if you need more advice on allowable expenses.
If your allowable expenses are more than your other income, you’ll have made a loss. Remember to keep a separate record of income and expenses for each type of other income. If you made a loss this year, you may only use it against income of the same type in a later year.
If you have unused losses from earlier years, these will be set against other income of the same type this year, or added to the loss this year and carried forward to later years. If your unused losses from earlier years are from more than one type, you’ll need to separately identify the amount of the loss arising from each.
Use working sheet 1 to keep the different types of income separate.
Use a different column for each type of income in working sheet 1. Then follow the instructions on the working sheet to work out the figures to include in boxes 17 and 18 of the ‘Other UK income’ section on page TR 3 of your tax return and boxes 1 and 2 of the ‘Other information’ section on page Ai 3 of the Additional information pages. Working sheet 1 will also allow you to keep a record of any losses you want to carry forward to next year.
Employment lump sums, compensation and deductions and certain post-employment income
This section will help you work out what figures to put in boxes 3 to 10 of the ‘Employment lump sums, compensation and deductions, certain post-employment income’ section on page Ai 2 of the Additional information pages, if you’ve received certain large payments (usually in cash and excluding pensions) or benefits from your employer or former employer.
Third party arrangements
Please note that you should also use box 3 to enter income arising after the end of your employment that’s covered by the third party arrangements or ‘disguised remuneration’ rules. There are detailed conditions about income taxable under these rules. Ask your tax adviser for more information.
As for other income in boxes 3 to 10, your former employer may have taken PAYE tax off some or all of the income. If you haven’t included that tax in box 2 of the Employment page of your tax return, enter it in box 6.
Other payments in boxes 3 to 10
Such payments may occur:
- for the termination of your job (whether agreed or paid before, on or after the termination)
- when your terms of employment change
- in anticipation of retirement or on or after retirement or death – if made from an Employer Financed Retirement Benefit Scheme (a scheme providing benefits which include retirement and death benefits usually set up by your employer but not registered by HMRC)
- when you receive payments or other consideration for a restrictive covenant
If all you have is a redundancy payment up to £30,000 against which your employer has allowed an exemption, just fill in box 9 with the amount of the payment. For example, if you received a redundancy payment of £10,000 it would be covered by the £30,000 exemption so leave box 5 blank and enter £10,000 in box 9. If your redundancy payment is more than the £30,000 exemption limit, enter the amount over the limit in box 5, the tax taken off in box 6 and the £30,000 limit in box 9.
If your payment was £40,000 you would enter £10,000 in box 5, the tax taken off in box 6 and £30,000 in box 9. If the payment was less straightforward, read through these notes before you start to fill in the boxes in working sheet 2 or transfer information to boxes 3 to 10. If you need more help, please contact HMRC or speak to your tax adviser.
For more information about online forms, phone numbers and addresses contact Self Assessment: general enquiries.