Self employment and retirement

Lleucu

Bore da.

I am wondering whether I need to carry on registered as self employed with HMRC.

I have just hit 60 and receive my deferred LGPS pension and lump sum.:j I left Local Government 10 years ago but my pension based on 27 years was frozen. After I left, I became self employed. I also have a buy to let fully paid off. I have to thank people on these forums for help over the years in sorting things out for me.

I have looked at the overhead costs of continuing as self employed. They add up - registration, accountancy fees, CPD, NI. I have a very good accountant but it is expensive this year £600 inc VAT.

I also note the threshold for 40% tax in 2013/14 is £32010.

Questions:

1. Do I just contact HMRC and say I want to cease to be treated as self employed?
2. How does the tax work? Currently pay twice yearly in January and July.
3. I am likely to do the odd piece of work, is this just entered on tax form, and how do the costs work?
4. Do I need an accountant to do this if I cease to be self employed. (still left with PAYE pension and buy to let plus occasional earnings.

Thanks in anticipation of your help.

Laurajo_2

You will still need to complete a tax return for the buy to let property, however I don't know if you would feel confident enough to do this on your own?

Tax on the buy to let will be due in January. If your tax bill is over 1k, or less than 80 percent of your overall bill is taxed under PAYE, you will need to make payments on account apin January and July - which is what you have been doing now..

If you are carrying on doing occasional work, you can keep as registered for self employment but, if your earnings from that source are below the NI threshold you can apply for an exception so you don't have to pay.

If you really want to cease self employment, just ring hmrc. One off work can be entered in the other income box - net of allowable costs.

Lleucu

Thanks, I think I understand how the system works well enough to do my own tax form, I have 10 years of beautifully prepared accounts as a template. I will also be PAYEd on the LG Pension, so the tax will be due on the rented house plus any other misc income.

CLAPTON

40% tax starts at 41,450 per annum in the tax year 2013-14

Lleucu

I thought the threshold was being reduced for 40%

nomunnofun

Lleucu wrote: »

I thought the threshold was being reduced for 40%

It has been. The personal allowance is 9445 with the next 32010 taxed at 20% - a total of 41450 before 40% rate is reached - a mistake made by, literally, hundreds on this forum.

jumperabv3

nomunnofun wrote: »

It has been. The personal allowance is 9445 with the next 32010 taxed at 20% - a total of 41450 before 40% rate is reached - a mistake made by, literally, hundreds on this forum.

The personal allowance is not 8105 ?
Is it 9445 now?

:eek:

zygurat789

440

jumperabv3 wrote: »

The personal allowance is not 8105 ?
Is it 9445 now?

:eek:

The PA for 2012/13 was 8105 for 2013/14 it is 9440 for all those who file a tax return but if you are on PAYE you will probably get 9445.

jumperabv3

zygurat789 wrote: »

440

The PA for 2012/13 was 8105 for 2013/14 it is 9440 for all those who file a tax return but if you are on PAYE you will probably get 9445.

Thanks so much!
:T