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"Other income" in an SA return

"Other income" in an SA return

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We act for an individual who undertook a small amount of freelance work in 2008-09, which started and ceased in the year, the gross receipts amounting to about £2K. The income was not employment income. Equipment was purchased for the sole purpose of pursuing this work, and the difference between the cost and open market value on cessation was about £2K.

The individual, who is below pensionable age, never registered to pay class 2 NIC (and has no other self-employment source).

Granted that a late registration backed by a CF10 would probably be OK, I wondered whether it would be simpler just to enter £2K in each of boxes 15 and 16 of page TR3 (Other income less relevant expenses).

The SATR refers us to the help notes on page TRG13. These notes explicitly allow for the taxpayer to enter "casual earnings" and "freelance income" in box 15, but also explicitly denies an opportunity to include capital allowances in box 16, and there appears to be no other box for that entry (other than by dealing with it through the self employment supplementary pages).

Is this an oversight in the help notes?
Clint Westwood

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By geoffwolf
17th Jun 2009 18:21

mountains out of molehills
Seems to me the easiest answer is either to comlete the short form of se page or put nil in other income with a white space explanation. If there is a loss why not claim it against other income but use the SE pages.

NI can be ignored because its below the exception limit.Don't believe the nonsense that late claims for exception not being allowed.

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By AnonymousUser
17th Jun 2009 17:01

Follow-up
I am wondering whether Capital Allowances are denied on the grounds that if the activity comprises a trade or profession (when the CAs would be allowed) then the activity should be included on the supplementary pages, while if it does not comprise a trade or profession then it does not fall within a qualifying activity as defined in section 15(1) CAA 2001.

Presumably the argument is that it is possible for earnings still to be regarded as earnings whilst not falling into any of the categories of employment, trade, profession or vocation, and for that "nothing" category you fall outside the capital allowances net.

That seems a little harsh. I wonder whether any reader has encountered an occasion in which a taxpayer has completed the self-employment supplementary pages, and had an enquiry into the return followed by an adjustment comprising disallowed capital allowances, on the grounds that the income should not have been declared on the S/E pages but on the casual income pages of the return?

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