Don’t know what to do for the best

Terron

pip895 said:

An even better idea is to declare yourself self employed, just selling some unwanted possessions on ebay or marketplace will do.  You can then pay Class 2 NI at under £160/year.  You do have to fill in a tax return but there isn't much to that.

You need to be in "gainful self-employment" so a bit more than that should be needed.

Selling a few uneeded possession would not seem to qualify to me.

See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/959414/admh4.pdf

jamesd

That seems to be a universal credit manual and not one applicable to the NI contributions.

Dazed_and_C0nfused

jamesd said:

That seems to be a universal credit manual and not one applicable to the NI contributions.

True but I cannot see that his would ever be accepted as self employment by HMRC.

just selling some unwanted possessions on ebay or marketplace will do. 

There is an old document from HMRC called Hometraders which covers this in some detail.

https://www.gov.uk/government/publications/paying-tax-if-you-buy-and-sell-things-from-home

Not that it would be difficult to think of a genuine small business which would be perfectly valid.

Malthusian

If you could pay Class 2 contributions instead of Class 3 simply by claiming you were self employed on the basis you'd sold a few possessions on eBay, no-one would pay class 3 contributions.

Either there is a marvellously clever loophole in the tax rules which makes class 3 contributions virtually redundant, or "self-employment" means what it says.

pip895

In my own case I do planning consultancy - just drawing up planning drawings and helping fill out the forms mainly.  I have a friend who buys at car boot sales and sells on eBay and Marketplace.  Neither of us is claiming UC.

It would be difficult for her to prove that the things she sold on eBay weren’t personal possessions I suppose, but she has never been asked.

Silvertabby

I'm paying voluntary Class 3s (2 down, 2 to go).

They are already such a good deal I don't see the point in faffing about selling stuff on e-bay (with all the dangers that entails) just to be able to bend the truth on a tax return.

Albermarle

Silvertabby said:

I'm paying voluntary Class 3s (2 down, 2 to go).

They are already such a good deal I don't see the point in faffing about selling stuff on e-bay (with all the dangers that entails) just to be able to bend the truth on a tax return.

Sounds sensible. If you declare yourself self employed selling things on e bay , next thing could be HMRC enquiring as to your turnover , taxable profits etc 

Terron

jamesd said:

That seems to be a universal credit manual and not one applicable to the NI contributions.

I doubt that they invented a new definition of "gainful self-employment" for UC.

NICs certainly use a "gainful self-employment" test. I saw it I looked at NIM74250 which deals with property and investment income.

Someone who just "dabbles" in investment or property would not pass the "test for gainful (self-) employment in section 2(1)(b) of the SSCBA 1992" and not be entitled to pay class 2 contributions. Someone who does pass that test may pay class 2 contributions which I wanted to do last year so I looked at the test, and it seemed pretty much what the document I referenced says.

Only the original version of SSCBA 1992 is available on the government site so I can't be certain of the current state, but my payment of voluntary class 2 was accepted.

There is also HMRC's definition of "trade" to consider but I haven't really looked at that.

pip895

Albermarle said:

Silvertabby said:

I'm paying voluntary Class 3s (2 down, 2 to go).

They are already such a good deal I don't see the point in faffing about selling stuff on e-bay (with all the dangers that entails) just to be able to bend the truth on a tax return.

Sounds sensible. If you declare yourself self employed selling things on e bay , next thing could be HMRC enquiring as to your turnover , taxable profits etc 

You always needed to declare that stuff on your tax return anyway though you now need to have over £1000 profit to need to bother I believe.

Dazed_and_C0nfused

pip895 said:

Albermarle said:

Silvertabby said:

I'm paying voluntary Class 3s (2 down, 2 to go).

They are already such a good deal I don't see the point in faffing about selling stuff on e-bay (with all the dangers that entails) just to be able to bend the truth on a tax return.

Sounds sensible. If you declare yourself self employed selling things on e bay , next thing could be HMRC enquiring as to your turnover , taxable profits etc 

You always needed to declare that stuff on your tax return anyway though you now need to have over £1000 profit to need to bother I believe.

Not if you are "selling some unwanted possessions" though as was suggested earlier.