Starting a business to cut tax in retirement

older_and_no_wiser

I retired from work 2 years ago and am now 58yo. I started drawing on my pension last tax year and took my first withdrawal via UFPLS to maximise my tax free allowance and took approx £17K out of my SIPP (I have no DB pension).

My only income is from savings/bonds interest, dividend income (approx £4k a year) and the SIPP withdrawals. My net worth is around £1m.

Sport is my passion and I recently qualified as a registered pickleball coach. I am now coaching a number of groups at the local tennis club and making a couple of hundred quid a month from this. I'm not doing it for the income as I get so much pleasure from it and don't really need the income. I woke up this morning wondering if it would be of any benefit for me to register as a business. Would I get any further tax breaks in my retirement situation - or would it perhaps be a negative impact decision and/or just an unnecessary step?

chrisbur

You appear to already be a business for which you will need to register with HMRC

https://www.tax.service.gov.uk/guidance/check-non-paye-income/start/how-did-you-receive-additional-income?c=1

Isthisforreal99

https://forums.moneysavingexpert.com/discussion/6681774/starting-a-business-to-cut-tax-in-retirement

Although you may not be doing it for the income you are receiving income that is taxable and, as above, you need to register.

Not sure what 'tax breaks' you think may be on offer but put simply, you need to declare your income from your venture

Keep_pedalling

Assuming you mean starting a limited company rather than being self employed as a sole trader then I can’t see any advantage tax wise assuming it does not push you into the 40% tax bracket.

LITRG

Hi older_and_no_wiser

If you are earning trading income more than £1,000 per tax year then you may find our guidance on registering as self-employed helpful: https://www.litrg.org.uk/working/self-employment/self-employment-registering-tax-and-nic as well as our self-employment guide for new businesses: https://www.litrg.org.uk/working/self-employment/self-employment-guide . I hope you find these links useful.

sherlock228

looks like your gross income will be above the £1,000 tax year (Apr - Apr) threshold requiring you to compulsorily register as self employed

Obviously you will then be able to deduct actual expenses incurred in performing your coaching work to arrive at your net taxable profit

don't get side tracked trying to argue this is a "side hustle" or "casual" income. Go over the £1k threshold and it is no longer a bit on the side, it is now active trading through self employment to make money.
That said, for the amount involved, setting up a Ltd Company would be cost & tax inefficient, stick with sole trader
Become a sole trader: Register as a sole trader - GOV.UK