HMRC have sent me an invoice for Self-Employed Class 2 NICs.
I thought as I do not offer a service my income is treated as income earned from UK Property, simples.....
However, I have been advised from HMRC that depending how many properties you have and how they are managed depends if you are also self-employed.
For instance if you allow a letting agent manage your property in it's entirety you are not self-employed. But if you advertise your properties and/or do any repairs, you are classed as Self-Employed and need to pay class 2 NICs. Furthermore, if you have more than a certain amount of properties you are self-employed regardless who manages them.
This is new to me, does anyone know more about this ?
The point you raise is interesting as I have a client who has 5 properties that the let out and I met them the other day and said there must be a point where depending on the number of properties you have you are treated as self employed rather than a property landlord.
In their case they want to be treated as self employed as will have more flexibility with their losses on the trading of the properties.
I need to phone my tax helpline to get the answer and will come back as to the answer i get.
Thanks for your reply, I'm also interested in your comment about wanting to be self-employed because of more flexibility with losses, could you comment further on this?
On a side note, if you are employed as I am and you earn over £41,450 per year, you can apply for a deferment of payment CA7 2B. You will then be exempt for any Class 2 NICs.
Similarly, if you earn under £5,725 you can complete Small Earnings Exception (SEE).
