Guidance

Other taxable Income 2021 (HS325)

Updated 6 April 2024

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 (2021) 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 (2021) pages

1. 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, for example from casual earnings, commission or freelance income that’s not from employment or self-employment and taxable coronavirus support payments (if not reported elsewhere) in your Self Assessment return.

From 6 April 2017 receipts from self-employment and miscellaneous income of £1,000 or less are exempt from tax and do not 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 have already claimed part or all of your £1,000 trading income allowance against self-employed income then it is the unused amount, if any, that can be deducted to determine the taxable miscellaneous income.

For more information on:

• tax-free allowances on property and trading income
• receipts of casual earnings

You will 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 is not deductible. So you cannot generate a loss.

Contact HMRC or your tax adviser if:

• you’re not sure about what to include
• you need more advice on allowable expenses

2. Using losses

If your allowable expenses are more than your other income, you will 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 will need to separately identify the amount of the loss arising from each.

Use working sheet 1 (2021) to keep the different types of income separate.

Use a different column for each type of income in working sheet 1 (2021). 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 (2021) pages. Working sheet 1 (2021) will also allow you to keep a record of any losses you want to carry forward to next year.

3. 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 (2021) pages, if you have received certain large payments (usually in cash and excluding pensions) or benefits from your employer or former employer.

3.1 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 have not included that tax in box 2 of the Employment page of your tax return, enter it in box 6.

3.2 Other payments in boxes 3 to 10

Such payments may occur:

• in connection with 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 and the amount of post-employment notice pay is Nil, 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 after the amount of post-employment notice pay has been taken off, enter the amount over the limit in box 5, the tax taken off in box 6 and the £30,000 limit in box 9. Put the amount of taxable post-employment notice pay in box 5.

If your redundancy payment was £40,000 and £1,000 of that was taxable post-employment notice pay, you would enter £10,000 (£1,000 post-employment notice pay plus £9,000 redundancy pay) 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 (2021) or transfer information to boxes 3 to 10. If you need more help, please contact HMRC or speak to your tax adviser.

4. Contact

For more information about online forms, phone numbers and addresses contact Self Assessment: general enquiries.