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Posted Tue, 28 Nov 2023 16:39:47 GMT by Lucy
Hello, I have registered to HMRC - UK property income SA105 already and trying to file my self-assessment tax return now. I am a little bit confused and would appreciate your help. I run my own property business. It is my only full-time job. As far as I am aware, HMRC would consider this self-employment, and I can pay NI class 2. When I try to fill in the self-assessment, self-employment and rental income are two different sections. If I answer the question (Was your turnover more than £1,000 in total from all self-employments?) by yes, I have to add the earned amount later, then I would be also asked about (Did you receive income from UK land and/or property (including income from foreign property) over £1,000? ) and when I answer yes I would be also asked to add the earnings which make two entries for the same amount I earned. It seems to me that the only way is to delete the whole section of self-employment and only add the rental income section, which seems to disqualify me from Class 2 NI. My taxed earning is less than 11,900, and I am supposed to have NI class 2 treated as paid. Kindly advise on how to proceed with this. I would like to treat it as a self-employment business rather than just an additional rental income, as it is my only and main business.
Posted Thu, 30 Nov 2023 14:04:55 GMT by HMRC Admin 32

Rental income is not normally a business and as such is not liable to class 2 NI. Please see guidance below as to why.

Working for yourself

You will therefore only declare it as income from property.

Thank you.
Posted Thu, 30 Nov 2023 16:50:21 GMT by Lucy
Hi, But I understand it is a business in my case here, as written here Running a property business {You have to pay Class 2 National Insurance if your profits are more than £12,570 a year and 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]. Pls clarify ..
Posted Mon, 04 Dec 2023 12:39:08 GMT by HMRC Admin 19

Class 2 and Class 4 National Insurance contributions are paid on profits from self employment, also know as being a 'sole trader', as well as partnership profits. Legislation at ITTOIA05/S268, charges tax on rental income as property income since 6 April 2005, even if it could properly be regarded as a trade receipt. You can see guidance here: 

Work out your rental income when you let property

Thank you

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