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Posted Sat, 13 Nov 2021 21:20:21 GMT by bwel
I took early retirement in 2017 and have been mainly living off some property income on which I pay income tax through the self-assessment. I also offer fix-it / handyman services to anybody in the local area through word of mouth and Nextdoor App. I don’t charge much as its not full time and I essentially suggest that people pay me what you think it’s worth and my income through this has been a few hundred pounds a year - £400 to no more than £900 per year. Because the Income is less than £1000 per year, I had thought that I did not have to register for Self-Employment and that as that income is below the £1000 Trading Income Allowance, I did not need to register my self-employed Income with HMRC. Q1. Could you clarify if it is correct that registering Self Employment with HRMC is not required where annual self-employment income is less than the £1000 Trading Allowance? Recently, it was mentioned to me by a friend that I could have been paying Voluntary Class 2 NIC as this would then contribute towards my future State Pension qualifying years. I would have done this if I had known at the time, as currently I’m slightly short of qualifying years so do not qualify for the full state pension when I reach 67. Whilst I understand that no additional Income Tax would have been due on this self-employed trading income, the question of voluntary NIC Class 2 would be something I would like to do if possible. Q2. Can I retrospectively register for the Handyman Self Employment going back to starting date in mid-2017 i.e. going back four previous tax years and can I voluntary pay the Class 2 NIC for each of those years to date? If so how do I do it ? Q3. By not registering the Self-employment with less than £1000 trading amount from 2017, could I be subject to penalty ?
Posted Mon, 15 Nov 2021 15:15:41 GMT by HMRC Admin 17

Hi,
 
If you have any self employment income under £1000, before expenses, then you would not need to register or declare this income through self assessment.

If you decide to register then you would need to complete a tax return see link:

Register for Self Assessment    .

You can however look at just paying voluntary national insurance but you would need to speak to the national insurance team regarding this.

See link:

Voluntary National Insurance  .

There would be no penalties for not registering for self employment when you income is below the self employment trading allowance.

However there may be penalties involved if you register for previous as notification of self employment income needs to be done by the
5th October following the end of the tax year in which the trade commenced.

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