Self employment queries

Grouchy

Hello

First post on here and hope it is in the right place. And forgive me if some of the questions seem daft or self evident.

My situation is I had the opportunity to retire early and did so quitting my job last February 2011. I have rented out my house in June 2011 and live on that income, so in effect I am a landlord.

1. Being a landlord and having the income from the rent, does that make me automatically considered self employed?

2. I am just getting round to filling out an application for self assessment as a self employed sole trader. I want to keep up my NI contributions. Is this the best/most sensible thing to do? Do I put nature of business as 'landlord'?

3. I am planning to earn some extra income by starting up a small local computer fix-it business within the next few months.

Thank you for any advice.

ceeforcat

1) No you are definitely not self-employed because you receive rental income.

2)Do not register as self employed on the basis of your rental income. this is completely incorrect. You do not pay NI on rental income and the only way to keep up your contribution record is to pay voluntary contributions.
3) Now. that is self employed income.

Question - do you rent out your own house? How much gross rental do you receive before expenses? It could be that you do not have to declare this income at all.

Grouchy

Thanks ceeforcat.

Perhaps I should have started by asking for more basic advice as I see my impression of what I should be doing may be incorrect.

I rent out the house for £1500 per month and receive after agency maintenance charges £1300 net. I own this house (it has a small mortage to pay off). I do not live with my tenants, but live in another residence. It is my only income at present.

Can you advise better with this info?

ceeforcat

Register by ticking the income from land land and property box. You must do this and, therefore, inform HMRC of this income by 5th October 2012. However, I would not do this before 5th April as, in my experience, you will end up with a tax return for 2010/11 to complete within 90 days which, in your case, is unnecessary.

Your first return will be for 2011/12 tax year and it must be submitted by 31st January 2013 if doing it online.

Grouchy

ceeforcat wrote: »

Register by ticking the income from land land and property box.

Thanks for that info, but what does the above mean?

Also, I want to keep up my NI, can I pay voluntary NI for the period until I start my computer business and then register as a sole trader for NI purposes then?

Thanks.

CLAPTON

how old are you
how many years of NI qualifying years do you have
have you obtained a state psnsion forecast

Grouchy

Clapton
I'm 55
I don't know (have lived abroad a fair bit)
No

ceeforcat

http://www.hmrc.gov.uk/sa/forms/sa1.pdf

This should help to explain and is the form for registering. Note there is a separate registration to do if you wish to file your returns online.

CLAPTON

Grouchy wrote: »

Clapton
I'm 55
I don't know (have lived abroad a fair bit)
No

well best to get a pension forecast
you need 30 qualifying years and you have 10 more years left to work

see here
http://www.direct.gov.uk/en/Pensionsandretirementplanning/StatePension/StatePensionforecast/DG_10014008

Grouchy

Thanks both, that has cleared a few things up and I will pursue some things mentioned.

agrinnall

I would suggest that you post in the House Buying, Selling and Renting forum where you will get a lot of advice on what expenses are allowable against your letting income and how best to maximise what you retain and minimise what the taxman takes.