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Self employment?

Hi, looking for a little bit of easy to understand help please.

For 8 years 'ish' I have been renting out a property and doing a self assessment tax form to declare the rent.  I am now just a couple of years from retirement and am short on my NI contributions.  I have discovered I can become self employed and pay class 2 contributions which would mean me paying around £200/year as opposed to around £800/year to fill the missing years..............

But, at my age I'm scared stiff of becoming self employed - is it expensive to start with?  Will it open up a can of worms? Am I better to let sleeping dogs lie?

I've been looking on line for hours and go round in circles so if anyone has some words of wisdom please can you help?

Comments

  • What sort of business do you think you could start?

    Why do you think it would be expensive to start with?  Are you thinking of selling Ferraris 🤔
  • Nearlyold
    Nearlyold Posts: 2,358 Forumite
    Tenth Anniversary 1,000 Posts Name Dropper Combo Breaker
    Do you mean pretending your rental income is from self employment?
  • mrsjaw
    mrsjaw Posts: 56 Forumite
    Part of the Furniture 10 Posts Name Dropper Combo Breaker
    What sort of business do you think you could start?

    Why do you think it would be expensive to start with?  Are you thinking of selling Ferraris 🤔
    What a friendly lot you are!

    According to the gov website I can become a sole trader if I earn over £6000 ish and under £12000 ish from renting property.  I have no experience of setting up a business and can't find out if there would be a cost to starting one.

    Nearlyold said:
    Do you mean pretending your rental income is from self employment?
    I wouldn't have to pretend anything - I already earn about £8000 from renting a property which is declared on my HMRC self assessment, I just didn't know I could become a sole trader and top up my NI contributions.
  • Grumpy_chap
    Grumpy_chap Posts: 17,036 Forumite
    Tenth Anniversary 10,000 Posts Name Dropper Combo Breaker
    edited 16 August 2023 pm31 7:34PM
    mrsjaw said:
    I wouldn't have to pretend anything - I already earn about £8000 from renting a property which is declared on my HMRC self assessment, I just didn't know I could become a sole trader and top up my NI contributions.
    As I understand it, you cannot.

    Your property rental income is declared on pages SA105.

    Self-employment income (sole trader) is declared on pages SA103.

    If you intend to be a sole trader you would have to have a trade that you deliver.

    mrsjaw said:
    According to the gov website I can become a sole trader if I earn over £6000 ish and under £12000 ish from renting property.  

    Do you mean this link?
    https://www.gov.uk/renting-out-a-property/paying-tax

    Class 2 NI may apply if "what you do counts as running a business, for example if all 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"
    (My bold).
    You would seem to fall at the second hurdle if not the first:
    mrsjaw said:
    I have been renting out a property 
    (My bold again)
    "a" property does not infer plural.  Unless that is a typographical error.
  • Massively,massively varies in cost from what you want to do. You could start with £20 or £20,000,000.

    I was self employed for about three years doing groundworks & maintenance,and picking up odd jobs inbetween such as garden tidy ups and clearances. This was about 6 years ago now so prices have changed drastically.

    Costs -

    Time - I spent hours, days, looking for work.Sending out cold emails to housing associations, construction companies etc,estate agents,offering a list of services with costs. I'd say for about 300 emails to companies around the North East,I probably got about 12 replies with a follow up of work. This did eventually lead to more work through word of mouth.

    Vehicle - £3500. I bought a second hand Transit Connect,wasn't pretty but it was enough to get from job to job,good on fuel and could carry tools etc.

    Tools - £2500 give or take. This was for general hand tools, power tools and everything inbetween.

    On average to start with I was probably picking up 2-4 jobs per week, averaging around £600, this would fluctuate from as much as £3000 a week to £400. Eventually once Covid start to take a good hold and sites shut down etc, I sold up and went back to being employed.

    It was fun and I don't regret it, however there's always an uncertainty. Study the market to what is around you,how many companies already do the work etc, who you target consumer would be and so on, and always keep at least half of any paid job to one side for your taxes and rainy days.
  • Marcon
    Marcon Posts: 12,963 Forumite
    Eighth Anniversary 10,000 Posts Name Dropper Combo Breaker
    mrsjaw said:
    Hi, looking for a little bit of easy to understand help please.

    For 8 years 'ish' I have been renting out a property and doing a self assessment tax form to declare the rent.  I am now just a couple of years from retirement and am short on my NI contributions.  I have discovered I can become self employed and pay class 2 contributions which would mean me paying around £200/year as opposed to around £800/year to fill the missing years..............

    But, at my age I'm scared stiff of becoming self employed - is it expensive to start with?  Will it open up a can of worms? Am I better to let sleeping dogs lie?

    I've been looking on line for hours and go round in circles so if anyone has some words of wisdom please can you help?
    Plenty of basic guidance readily available: https://www.gov.uk/browse/business/setting-up

    Only you know if the difference in NI rates makes the 'headache' worthwhile...
    Googling on your question might have been both quicker and easier, if you're only after simple facts rather than opinions!  
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