New property and trading allowances must be publicised, says LITRG

The new property and trading income allowances came into effect on 6 April. These offer tax-free allowances of up to £2 000 a year or a tax saving of up to £400 a year for a basic rate taxpayer if both apply. But a lack of guidance or publicity may result in exceptionally low take-up the Low Incomes Tax Reform Group (LITRG) has warned.

Anthony Thomas LITRG chairman said: ‘Lack of guidance may lead to unnecessary confusion among those likely to benefit most from the new reliefs – people on low incomes who cannot afford professional advice. There is a risk for benefits claimants as the new rules apply for tax and tax credits only – so the income will still be counted for means-tested benefits purposes unless any separate disregard applies.

Detailed guidance should be published as soon as possible he said ...