I have been reviewing my last two years’ tax returns. In one of them, I have two self-employments. Self-employment income is £20,000 and expenses £10,000. On the second one I have income of £10,000 and a trading allowance of £1,000 has been offset. Is the trading allowance actually allowable against the second business income?

Arthur Weller replies:
If you look at HMRC guidance on the Gov. uk website (www.gov.uk/guidance/tax-freeallowances-on-property-and-trading-income), in your circumstances the ‘trading allowance’ is not available because where ‘the annual gross trading or property income from one or more trades or businesses is more than £1,000, you can use the tax-free allowances, instead of deducting any expenses or other allowances’. Since you are deducting expenses of £10,000 on the first selfemployment, this precludes using the trading allowance on the second self-employment.