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HMRC internal manual

Business Income Manual

TMIA - Computation: Partial Relief: Multiple Trades and Miscellaneous Income

If the individual qualifies for partial relief and their relevant income for the year includes receipts of one or more relevant trades and miscellaneous income, then the profits for the tax year of their relevant trades and miscellaneous income, are calculated using the following steps for each trade.


Step 1 – Calculate total receipts of each trade and Miscellaneous income:


Individuals should calculate the total amounts which would be brought into account as a receipt in calculating the profits of each of their relevant trades for the tax year.


Individuals should calculate the total amounts of Miscellaneous income for the tax year.


Step 2 – Subtract the deductible amount from receipts, allocating between trades and miscellaneous income as desired:


Individuals then subtract an amount from the total receipts for each relevant trade given in Step 1 above and subtract an amount from their miscellaneous income given in Step 1 above. They cannot also deduct any expenses in calculating the profits of any relevant trade that would otherwise be allowable.



This will leave them with a figure of taxable profits for each of their trades and an amount chargeable as miscellaneous income.


The amount of allowance to be subtracted from different trades, or from miscellaneous income, can be distributed between the different trades and miscellaneous income based on the individual’s preference. However, the amounts subtracted under this step cannot be used to produce a loss for any trade(s), nor can it lead to a miscellaneous income loss.


The total amount to be subtracted from each different trade, and from the source of miscellaneous income, is the deductible amount. This deductible amount must not exceed the trading allowance.


If an individual is claiming overlap relief during the year (because they are in their final year of trading, or have recently changed accounting date), then continue to Step 3.


Step 3 – Subtract overlap relief:


The subtotal given in Step 2 is then reduced by subtracting a deduction for overlap profit allowed in calculating the profits of the particular trade(s) for the tax year.


More guidance on overlap relief can be found at BIM86044.