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  • FIRST POST
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 2:26 PM
    • 71Posts
    • 11Thanks
    Gold Anaconda
    only source of income from property
    • #1
    • 8th Jan 18, 2:26 PM
    only source of income from property 8th Jan 18 at 2:26 PM
    If your only source of income is from a property, are you classified as self-employed or not self-employed for tax purposes?

    I have had conflicting answers.

    I am a landlord.
Page 1
    • laticsforlife
    • By laticsforlife 8th Jan 18, 2:38 PM
    • 1,174 Posts
    • 1,458 Thanks
    laticsforlife
    • #2
    • 8th Jan 18, 2:38 PM
    • #2
    • 8th Jan 18, 2:38 PM
    Why does it matter?

    You still have (taxable) income from property (IFP), to be declared on the relevant page on a Self-Assessment tax return.
    I didn't do it, nobody saw me do it, you can't prove a thing!
    Quidco, £1,985
    Shopandscan, £2,510
    Tesco Double The Difference, £2,700
    TopCashback,£1,807
    Thomson EU261/04 Claim, £1,700
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 2:40 PM
    • 71 Posts
    • 11 Thanks
    Gold Anaconda
    • #3
    • 8th Jan 18, 2:40 PM
    • #3
    • 8th Jan 18, 2:40 PM
    It matters because when it comes to self assessment there is a self-assessment for self-employed and a sell assessment for non-self employed.

    Please read before writing pointless comments.
    • Tom99
    • By Tom99 8th Jan 18, 2:46 PM
    • 1,035 Posts
    • 628 Thanks
    Tom99
    • #4
    • 8th Jan 18, 2:46 PM
    • #4
    • 8th Jan 18, 2:46 PM
    "Running a property business

    You have to pay Class 2 National Insurance if your profits are over £5,965 a year and what you do counts as running a business, for example if all the following apply:

    • being a landlord is your main job
    • you rent out more than one property
    • you’re buying new properties to rent out"

    https://www.gov.uk/renting-out-a-property/paying-tax
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 2:49 PM
    • 71 Posts
    • 11 Thanks
    Gold Anaconda
    • #5
    • 8th Jan 18, 2:49 PM
    • #5
    • 8th Jan 18, 2:49 PM
    "Running a property business

    You have to pay Class 2 National Insurance if your profits are over £5,965 a year and what you do counts as running a business, for example if all the following apply:

    • being a landlord is your main job
    • you rent out more than one property
    • you’re buying new properties to rent out"

    https://www.gov.uk/renting-out-a-property/paying-tax
    Originally posted by Tom99
    An accountancy firm has told me that income from property is not being self-employed. Very hard to get a straight answer to this.

    I do not rent more than one property.
    • laticsforlife
    • By laticsforlife 8th Jan 18, 2:51 PM
    • 1,174 Posts
    • 1,458 Thanks
    laticsforlife
    • #6
    • 8th Jan 18, 2:51 PM
    • #6
    • 8th Jan 18, 2:51 PM
    It matters because when it comes to self assessment there is a self-assessment for self-employed and a sell assessment for non-self employed.

    Please read before writing pointless comments.
    Originally posted by Gold Anaconda
    Well in that case it's bl00dy daft, as it makes no difference does it!!

    Mind you in won't be the first daft thing HMRC has - a question with more than 2 answers.

    I'm therefore going with Yes, put yourself as self-employed. No hang on that doesn't seem right, answer No, you are not s/e. Nope that doesn't sound right either.

    Sorry, no idea now
    I didn't do it, nobody saw me do it, you can't prove a thing!
    Quidco, £1,985
    Shopandscan, £2,510
    Tesco Double The Difference, £2,700
    TopCashback,£1,807
    Thomson EU261/04 Claim, £1,700
    • laticsforlife
    • By laticsforlife 8th Jan 18, 2:53 PM
    • 1,174 Posts
    • 1,458 Thanks
    laticsforlife
    • #7
    • 8th Jan 18, 2:53 PM
    • #7
    • 8th Jan 18, 2:53 PM
    An accountancy firm has told me that income from property is not being self-employed. Very hard to get a straight answer to this.

    I do not rent more than one property.
    Originally posted by Gold Anaconda
    I think the answer means that if you have a business of renting properties (i.e. more than 1) then that's clearly a business, so is s/e, but if you just say rent out mum's old house, then you clearly aren't running a commercial business, so it's a no.

    Maybe!
    I didn't do it, nobody saw me do it, you can't prove a thing!
    Quidco, £1,985
    Shopandscan, £2,510
    Tesco Double The Difference, £2,700
    TopCashback,£1,807
    Thomson EU261/04 Claim, £1,700
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 2:58 PM
    • 71 Posts
    • 11 Thanks
    Gold Anaconda
    • #8
    • 8th Jan 18, 2:58 PM
    • #8
    • 8th Jan 18, 2:58 PM
    So you can see why I'm having difficulty.

    I obviously need to get my UTR, so I filled out the non-self employed form and hopefully will recieve the UTR within 10 days so I can do the assessment online.

    If there's a problem I'll deal with it then, as then I'll at least have the UTR before end of January.
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 3:00 PM
    • 71 Posts
    • 11 Thanks
    Gold Anaconda
    • #9
    • 8th Jan 18, 3:00 PM
    • #9
    • 8th Jan 18, 3:00 PM
    I think the answer means that if you have a business of renting properties (i.e. more than 1) then that's clearly a business, so is s/e, but if you just say rent out mum's old house, then you clearly aren't running a commercial business, so it's a no.

    Maybe!
    Originally posted by laticsforlife
    The firm didn't seem to think there was a limit on the amount of properties you can have, it's still not self-employed.

    Yes, confusing.
    • Tom99
    • By Tom99 8th Jan 18, 3:34 PM
    • 1,035 Posts
    • 628 Thanks
    Tom99
    If you only have one property then you are not self employed.
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 8th Jan 18, 3:37 PM
    • 2,997 Posts
    • 1,712 Thanks
    TheCyclingProgrammer
    Well in that case it's bl00dy daft, as it makes no difference does it!!

    Mind you in won't be the first daft thing HMRC has - a question with more than 2 answers.

    I'm therefore going with Yes, put yourself as self-employed. No hang on that doesn't seem right, answer No, you are not s/e. Nope that doesn't sound right either.

    Sorry, no idea now
    Originally posted by laticsforlife
    It does make a difference.

    You pay income tax in both cases but if you’re running a property business and therefore treating yourself as self employed then you will also have NIC to pay.

    In OPs case it sounds like normal property income.
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 3:43 PM
    • 71 Posts
    • 11 Thanks
    Gold Anaconda
    I also want to pay NIC of course so I'll be paying that either way.
    • Pennywise
    • By Pennywise 8th Jan 18, 3:56 PM
    • 9,667 Posts
    • 17,804 Thanks
    Pennywise
    I also want to pay NIC of course so I'll be paying that either way.
    Originally posted by Gold Anaconda
    You can't pay class 2 NIC if you're not self employed.

    Having and renting one property is highly unlikely to be self employment as it's not a "business" if you're just passively renting out a property.

    Being a "business" means more, i.e. providing other services besides the property, such as providing recreational facilities, such as a swimming pool, fishing lake, or providing meals, or providing day trips etc, i.e. more of a "holiday" business rather than renting out a house. In fact a "holiday letting" is a business for some tax purposes.

    The other way it becomes a business is if you have multiple properties and start to spend a lot of time managing them, i.e. getting tenants, chasing arrears, doing repairs, etc. But you do have to spent a lot of time, so we are talking about several properties, not just one!

    Unless you're providing other services, with just 1 property, you're not self employed/in business. The incomes/profits are declared on the property pages of your SA tax return, not the self employment pages.
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 5:28 PM
    • 71 Posts
    • 11 Thanks
    Gold Anaconda
    You can't pay class 2 NIC if you're not self employed.

    Having and renting one property is highly unlikely to be self employment as it's not a "business" if you're just passively renting out a property.

    Being a "business" means more, i.e. providing other services besides the property, such as providing recreational facilities, such as a swimming pool, fishing lake, or providing meals, or providing day trips etc, i.e. more of a "holiday" business rather than renting out a house. In fact a "holiday letting" is a business for some tax purposes.

    The other way it becomes a business is if you have multiple properties and start to spend a lot of time managing them, i.e. getting tenants, chasing arrears, doing repairs, etc. But you do have to spent a lot of time, so we are talking about several properties, not just one!

    Unless you're providing other services, with just 1 property, you're not self employed/in business. The incomes/profits are declared on the property pages of your SA tax return, not the self employment pages.
    Originally posted by Pennywise
    Some questions:

    1) if the property was to be let to multiple tenants each with different tenancy agreements, would this be defined as more than one property?

    2) Likewise if the property was split into more than one property for the purposes of council tax, would this be defined as more than one property?

    3) I will need to pay NIC voluntarily if I can't pay it via class 2. Which is the better from my perspective? I.e. would it be better to register as a class 2 self-employed if it means my contributions would be less than voluntary NIC?

    Many thanks if you can answer that
    • xylophone
    • By xylophone 8th Jan 18, 6:02 PM
    • 24,055 Posts
    • 14,066 Thanks
    xylophone
    http://forums.moneysavingexpert.com/showthread.php?p=70986851#post70986851

    Why not follow the suggestion in post 9?

    https://www.gov.uk/government/publications/abolition-of-class-2-national-insurance-contributions/abolition-of-class-2-national-insurance-contributions might help.
    • 00ec25
    • By 00ec25 8th Jan 18, 7:34 PM
    • 5,800 Posts
    • 5,255 Thanks
    00ec25
    It matters because when it comes to self assessment there is a self-assessment for self-employed and a sell assessment for non-self employed.

    Please read before writing pointless comments.
    Originally posted by Gold Anaconda
    you have missed the fact that income from property is a SEPARATE category in its own right. It is neither employment income, self employment income, nor investment income.

    That is why there are separate pages on your tax return called UK property pages. The reason being that HMRC has fought a successful action to prevent rental income from being classed as trading income and therefore enabling losses to be offset against other employment or self employment income. Losses incurred from property letting can only be offset against future profits. They cannot be backdated, nor can they be claimed against other sources of income.

    The main exception being Furnished Holiday Lets (FHL) and Bed & Breakfast activity both of which are categorically accepted to be trading income and therefore subject to the rules for trading losses.
    Last edited by 00ec25; 08-01-2018 at 7:37 PM.
    • Gold Anaconda
    • By Gold Anaconda 8th Jan 18, 11:30 PM
    • 71 Posts
    • 11 Thanks
    Gold Anaconda
    you have missed the fact that income from property is a SEPARATE category in its own right. It is neither employment income, self employment income, nor investment income.
    Originally posted by 00ec25
    I don't give a !!!! to be quite honest I just want to pay what I owe, get my NIC paid and get on with my life if that's alright with you? None of that meant anything to me. Sorry not a topic I'm passionate about.
    • 00ec25
    • By 00ec25 8th Jan 18, 11:46 PM
    • 5,800 Posts
    • 5,255 Thanks
    00ec25
    It matters because when it comes to self assessment there is a self-assessment for self-employed and a sell assessment for non-self employed.

    Please read before writing pointless comments.
    Originally posted by Gold Anaconda
    I also want to pay NIC of course so I'll be paying that either way.
    Originally posted by Gold Anaconda
    I don't give a !!!! to be quite honest I just want to pay what I owe, get my NIC paid and get on with my life if that's alright with you? None of that meant anything to me. Sorry not a topic I'm passionate about.
    Originally posted by Gold Anaconda
    oh didums, all upset because he is not being told what he wants to hear

    let's repeat in the vague hope it may sink in: not self employed, not employed, not investing, no NIC

    what you owe explained (even for the simple) here: https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income
    • 00ec25
    • By 00ec25 8th Jan 18, 11:55 PM
    • 5,800 Posts
    • 5,255 Thanks
    00ec25
    Some questions:

    1) if the property was to be let to multiple tenants each with different tenancy agreements, would this be defined as more than one property? How many properties have you let? Answer = 1

    2) Likewise if the property was split into more than one property for the purposes of council tax, would this be defined as more than one property? irrelevant, all rental income (ie profit) is aggregated for the purposes of income tax

    3) I will need to pay NIC voluntarily if I can't pay it via class 2. Which is the better from my perspective? I.e. would it be better to register as a class 2 self-employed if it means my contributions would be less than voluntary NIC?
    NO NIC - you are not undertaking a trading activity.
    ( I appreciate that level of subtlety is above your head )


    Many thanks if you can answer that
    Originally posted by Gold Anaconda
    as above in red
    Last edited by 00ec25; 08-01-2018 at 11:57 PM.
    • TheCyclingProgrammer
    • By TheCyclingProgrammer 9th Jan 18, 12:00 AM
    • 2,997 Posts
    • 1,712 Thanks
    TheCyclingProgrammer
    Could OP be eligible to pay voluntary class 3 contributions?

    https://www.gov.uk/voluntary-national-insurance-contributions/who-can-pay-voluntary-contributions
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