Is it worth me registering as self employed?

Minkypoo

I've never used a forum for advice before so bare with me!

My husband works full time and I am a stay at home mum for our 2 year old son. I do not work at all. We currently qualify for working Tax and Child Tax Credits. We own 2 houses. One we live in and the other we rent out.

We make about £80.00 profit per month from the rental house after the mortgage and letting agents fees have been paid. We'd like to buy another house to rent out again, probably making up to about £150 profit per month.

Should I register as self employed and have the property rentals in my name or does it make no difference to the tax we pay? We rely on the Tax Credits we get especially now as the company my husband works for had banned all bonuses. My husband has recently sarted paying ino a company pension and we have been told that can be off-set against tax.
I am completely confused and am not sure who to ask for advice. I do not have a pension and the idea of having the houses to rent was that we would sell on to pay for our sons university education if he wants it when he's old enough and the other as a form of income when my husband and I retire.
Please get back to me if anyone has any experience of this or can point me in the direction of someone who can help. Thanks in advance.

Money_Grabber13579

The only difference being self employed would really make is the difference in National Insurance contributions. There are different allowances, however I don't see that they apply in your case. So for you, as far as I'm aware, there's probably no real benefit, however I'm not entirely sure... Maybe there's some obscure advantage?

fengirl_2

Letting a property is only counted as self employment if you provide services to the tenants over and above what a landlord would normally provide in a property, eg meals, cleaning, etc. As the property is jointly owned, you each need to declare your own half of the rental income (although as you are not liable you dont actually do this). If you had a property in your name, then the income would be yours for tax purposes.
Your husband will get tax relief on his pension contributions, but only against his salary.

Pennywise

Minkypoo wrote: »

We make about £80.00 profit per month from the rental house after the mortgage and letting agents fees have been paid. We'd like to buy another house to rent out again, probably making up to about £150 profit per month.

I assume you mean after mortgage interest - you can't claim for the capital repayments, just the interest.

If the property is jointly owned, you should already be filling in tax returns and declaring the "profit" both on tax returns and tax credit returns. The basic rule is that you have to share the profits equally if you own the property equally, but there are alternative ways for which you would need to see a solicitor or accountant for your options and how to do it.

PlutoinCapricorn

If you look at a tax return form, there are separate sections for income from property rental and for income from self-employment. The latter is where you declare income from actual work, usually for an assortment of different companies: someone retains you to do a job for them.