Concession about treating certain employment income as trading income

12 August 2015

In October 2014 HMRC proposed to withdraw an extra-statutory concession which they believed to be used by only a very small number of people - EIM 03002: Professional remuneration administrative practice.

The concession EIM 03002 allows professional practitioners to treat incidental income from an office or employment as part of their trading or professional income for tax (but not National Insurance) purposes.

HMRC’s view set out in the technical note was that Defra were the main users of this concession and that following a change in their procedures the concession was largely no longer needed and should be withdrawn with effect from 6 April 2016.

However the responses received on this concession showed that it is used much more widely than HMRC believe and 9 out of the 10 respondents objected to the proposed withdrawal. In light of this HMRC are continuing to consider the responses and will consult further with interested groups and wider stakeholders over the coming months in order to better understand the use of the concession and the impacts of its withdrawal.

HMRC will also consider any mitigation options, particularly for affected groups, before a final decision is taken on whether to continue with the proposed withdrawal of this concession.