The trading allowance does not relieve miscellaneous income (ITTOIA 2005 s. 783AB) #2725

Problem

The trading allowance (ITTOIA 2005 Part 6A Chapter 1) gives relief on "the income of a relevant trade" and on "miscellaneous income" (s. 783A(1)), sharing one allowance. Section 783AB defines that miscellaneous income as income chargeable under Part 5 Chapter 8 (income not otherwise charged, s. 687), measured before expenses. The Budget 2026 OOTLAR (section 1.5) says the allowance "provides relief for trading and miscellaneous income".

In the model, trading_allowance_deduction reduces trading profits only, and taxable_miscellaneous_income is max(0, miscellaneous_income). Someone with £30,000 of pay and £2,000 of casual income pays £200 more income tax than someone with £2,000 of trade receipts (finding 5 of the GPT-6.1 Sol review of #2719).

miscellaneous_income can't simply be relieved as a whole: it is "income from any other source". policyengine-uk-data fills it from FRS odd jobs, royalties and other fields, and on SPI records from other income, incapacity benefit, other social security benefits, JSA and taxable termination payments. Most of that is not Chapter 8 income.