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Cornucopia

Flyonthewall wrote: »

Making an income as a landlord would usually mean you have to declare it....

Yes, I worded that badly and have changed it. What I meant is that there is no obligation to declare oneself as self-employed when acting as a landlord (the rental income pages are supplementary to the standard tax return). I assume the same applies to eBay (certainly, HMRC have not queried the small amount of eBay income I have declared over the past 3 years).

edit: Turns out there is another can of worms to be opened in regards to Landlords and self-employment.

http://www.accountingweb.co.uk/anyanswers/landlords-and-self-employment

If you're bringing in an income and you can work when you want (e.g. list items when you feel like it or going to fix something in a house when you want to) and you are responsible for it all then that means you're classed as self employed.

As I say, I have never registered as self-employed, although it could of course be that HMRC simply "tick that box" automatically when someone returns the Rental Income pages.

It makes a difference because a non-employed person is not liable for National Insurance contributions, but a self-employed person is.

Being PAYE or not has nothing to do with it.

The relevance of PAYE is because if you are PAYE, there is a good chance they will not send you a Tax Return unless you specifically ask for one, and therefore it would be easy to "forget" your eBay profits.

Flyonthewall

Cornucopia wrote: »

Yes, I worded that badly and have changed it. What I meant is that there is no obligation to declare oneself as self-employed when acting as a landlord (the rental income pages are supplementary to the standard tax return). I assume the same applies to eBay (certainly, HMRC have not queried the small amount of eBay income I have declared over the past 3 years).

edit: Turns out there is another can of worms to be opened in regards to Landlords and self-employment.

http://www.accountingweb.co.uk/anyanswers/landlords-and-self-employment

The .gov site explains about being a landlord and tax. For most they will be classed as self employed, which means they're declaring what they get and sorting tax.

As I say, I have never registered as self-employed, although it could of course be that HMRC simply "tick that box" automatically when someone returns the Rental Income pages.

It makes a difference because a non-employed person is not liable for National Insurance contributions, but a self-employed person is.

The relevance of PAYE is because if you are PAYE, there is a good chance they will not send you a Tax Return unless you specifically ask for one, and therefore it would be easy to "forget" your eBay profits.

Actually earlier you said "I already am considered both a Company Director and self-employed by HMRC (covering 2 other businesses)".

If you've registered with HMRC to let them know about the income you're getting and you do your own taxes then HMRC see you as self employed.

Unemployed people don't earn incomes though, that's why they're classed as unemployed.

It doesn't work that way, PAYE is to do with being employed. You can be employed and self employed. So you have to register as self employed. You can't just say I forgot, you didn't send me anything because you are in the wrong by not telling them you're self employed. So PAYE has nothing at all to do with it.

Cornucopia

Flyonthewall wrote: »

The .gov site explains about being a landlord and tax. For most they will be classed as self employed, which means they're declaring what they get and sorting tax.

Yes, it says this:-

Running a property business You’ll also have to pay Class 2 National Insurance if what you do counts as running a property business, eg if all of 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

You don’t pay National Insurance on your rental income if you’re not running a property business - even if you do work like arranging repairs, advertising for tenants and arranging tenancy agreements.


I wonder what it means by "new properties"? I do love this vague use of English...

I presume they have my Company Director status as my main job. Also I am not buying "new" properties in either sense of the word. Therefore I am not running a property business.

Actually earlier you said "I already am considered both a Company Director and self-employed by HMRC (covering 2 other businesses)".

I did indeed. I meant in the general sense of being self-employed as a Landlord, not the specific HMRC categorisation. I didn't realise when I said it that we would get into this level of detail.

If I open any more cans of worms on this, I think I'll be having a chat with an Accountant.

If you've registered with HMRC to let them know about the income you're getting and you do your own taxes then HMRC see you as self employed.

Not in my case, apparently. They have never asked me to account for National Insurance contributions, and therefore I am not self-employed. I fully accept that my circumstances may be more unusual than I thought they were.

Unemployed people don't earn incomes though, that's why they're classed as unemployed.

I said non-employed. i.e. someone who lives off investment income.

It doesn't work that way, PAYE is to do with being employed. You can be employed and self employed. So you have to register as self employed. You can't just say I forgot, you didn't send me anything because you are in the wrong by not telling them you're self employed. So PAYE has nothing at all to do with it.

PAYE doesn't excuse the liability, but it does introduce an extra step for many people of asking for, or downloading a Tax Return - that was the only point I was making. When I used to work full time, I was the only person in the office who always received a Tax Return.

Flyonthewall

Cornucopia wrote: »

Yes, it says this:-

Running a property business You’ll also have to pay Class 2 National Insurance if what you do counts as running a property business, eg if all of 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

You don’t pay National Insurance on your rental income if you’re not running a property business - even if you do work like arranging repairs, advertising for tenants and arranging tenancy agreements.


I wonder what it means by "new properties"? I do love this vague use of English...

I presume they have my Company Director status as my main job. Also I am not buying "new" properties in either sense of the word. Therefore I am not running a property business.

I'd assume they mean new as new to them, not new builds as I'm sure there are plenty of people who run property businesses and don't buy new builds. It should state somewhere though. That doesn't mean other things don't apply either as there's more to property and tax than that one thing.

I did indeed. I meant in the general sense of being self-employed as a Landlord, not the specific HMRC categorisation. I didn't realise when I said it that we would get into this level of detail.

If I open any more cans of worms on this, I think I'll be having a chat with an Accountant.

Not in my case, apparently. They have never asked me to account for National Insurance contributions, and therefore I am not self-employed. I fully accept that my circumstances may be more unusual than I thought they were.

I said non-employed. i.e. someone who lives off investment income.

PAYE doesn't excuse the liability, but it does introduce an extra step for many people of asking for, or downloading a Tax Return - that was the only point I was making. When I used to work full time, I was the only person in the office who always received a Tax Return.

Some people don't pay National Insurance Contributions, including people who run businesses involving land or property as well as others. I don't think that changes self employment. I know you said you don't run a property business, but property is involved. Not sure if profits make a difference.

Well all I'm going to say is you know your situation, there's been advice on here, the .gov site has all the info needed and if you have any questions there are various boards on here where you can get advice.

I pointed it out simply as it sounded as though you may be trading under a private account and maybe didn't realise, as I explained earlier. So if it's not the case that's fine, if it is (or even does become that) you know now about having to have a business account and all. As for the OP, that's been answered already.

Cornucopia

Flyonthewall wrote: »

I'd assume they mean new as new to them, not new builds as I'm sure there are plenty of people who run property businesses and don't buy new builds. It should state somewhere though. That doesn't mean other things don't apply either as there's more to property and tax than that one thing.

I was going by the introductory text (first line that I quoted) which said that all three bullets had to apply.

I agree that "buying new properties" is most likely to mean "new to you". Even then, it seems a strange criterion - implying that you could inherit 20 houses, and rent them all out, but not be running a property business.

I pointed it out simply as it sounded as though you may be trading under a private account and maybe didn't realise, as I explained earlier. So if it's not the case that's fine, if it is (or even does become that) you know now about having to have a business account and all. As for the OP, that's been answered already.

Thanks for the discussion - certainly a few things I need to look into.

Flyonthewall

Cornucopia wrote: »

I was going by the introductory text (first line that I quoted) which said that all three bullets had to apply.

I agree that "buying new properties" is most likely to mean "new to you". Even then, it seems a strange criterion - implying that you could inherit 20 houses, and rent them all out, but not be running a property business.

Thanks for the discussion - certainly a few things I need to look into.

Does say eg before it though. I'd say if all 3 apply then you are, without a doubt, running a property business but it is an example so it's possible to be doing so with some variations. So that may include inheriting and not having bought.

I think most would consider themselves running a property business in a situation such as that and go through any official stuff (like registering as self employed) for that without looking up and reading that exact paragraph and wondering if it applies. If you tell someone you're doing that they probably wouldn't question it, especially as you'd obviously have property, be gaining income from it etc. I also imagine HMRC would expect that and not be too happy otherwise as you are basically running a business regardless of how it happened lol.

Cornucopia

Since we started with questions about the validity and accuracy of official communications, it's only fitting we should find another example.

It says what it says: "e.g. if all of the following apply". I think that e.g. would more correctly be an i.e., but that would be an assumption on my part. Either way, the notion of "all three applying" would seem to be central to what they are saying. In my case, (3) definitely does not apply, and (1) probably doesn't apply, either. No doubt there is some detail somewhere that would tell me what is meant by "main job".

I wouldn't expect to have to jump through these hoops with HMRC, having declared rental income for many years.

It won't apply to most people, I don't think, because they will typically be PAYE salaried people, and therefore this will not be their "main job".

Flyonthewall

Cornucopia wrote: »

Since we started with questions about the validity and accuracy of official communications, it's only fitting we should find another example.

It says what it says: "e.g. if all of the following apply". I think that e.g. would more correctly be an i.e., but that would be an assumption on my part. Either way, the notion of "all three applying" would seem to be central to what they are saying. In my case, (3) definitely does not apply, and (1) probably doesn't apply, either. No doubt there is some detail somewhere that would tell me what is meant by "main job".

I wouldn't expect to have to jump through these hoops with HMRC, having declared rental income for many years.

It won't apply to most people, I don't think, because they will typically be PAYE salaried people, and therefore this will not be their "main job".

Quite possibly. I guess that depends on the possible variations. If it's just them 3 but maybe little variations on them i.e. would make more sense, but if there are a number of others then e.g. works best.

So like it says main job. If it doesn't have to be your main job, just a job that would count as a little variation.

Main job would be the job earning the most.

You can't really make that assumption. Many people work part time so running a business could quite easily be the main job for many of them people. Even those working full time may put just as many, or even more, hours into their business and could quite possibly be earning more with that (especially if their full time job is at min wage and their business is a successful one).

Ting-Tang

Wow, what an incredibly boring discussion.

Flyonthewall

Ting-Tang wrote: »

Wow, what an incredibly boring discussion.

Wow, what an incredibly boring comment.