NIC2/4, expense receipt, checking self employed status, Home working expense queries

Hello I am asking several questions in the capacity of someone who is PAYE employed and works from home as there is no office to work from, and in addition, is a sole trader running a child minding service which operates at home. 1) How would the person check if they are reigstered as Self Employed (vs. someone who has to fill out an SA form, but never registered as Self Employed). 2) If in the capacity of sole trader, the person is going to be claiming actual expenses for home running costs (gas/electric etc, calculated as a proportion first by area, and then by business hours of use of that area) with respect to the child minding business. Can the person in the other capacity of the employee, also claim the £6 flat rate? 3) In the capacity of sole trader, can the person claiming actual expenses for home running costs, claim for the (business use portion of) home insurance as an expense? 4) When determining if the sole trader has to pay NICs Class 2 & 4 in accordance to the respective thresholds, is this always determined by gross profit (turnover minus expenses) or by profit once tax has been calculated and deducted? 5) Is it correct that the applicable figure for the NICs Class 2&4 thresholds are binary, in that if the applicable figure e.g. gross profit is £11,910, then assuming no exemptions apply, the person would need to pay NICs Class 2&4, but if the gross profit was £11,907, then they would not need to pay NICs Class 2&4? This seems odd to me, as it would take an expense of only a few £ to get back under the thresholds. 6) Where an expense receipt has been lost etc. is a copy of a bank/credit card statement a sufficient substitute? Thank you

Hi Oojafink,

1. they would be able to check their personal tax account to see if registered. if not, can phone HMRC but they should know if they are registered or not  
2. no  
3. see guidance at Expenses if you're self-employed  
4. class 2 would be due if no class 1 had been paid and is based on the level of income and the period of time they are self employed in the year.   
5. similar to question 4 as it also depends on the level of the PAYE income and amount of class1 national insurance paid

Thank you.

Hello Thank you for you answers. RE question 3 with respect to claiming expenses and the link that has been provided, https://www.gov.uk/expenses-if-youre-self-employed does not mention any type of insurance, however HS222 https://www.gov.uk/government/publications/how-to-calculate-your-taxable-profits-hs222-self-assessment-helpsheet/hs222-how-to-calculate-your-taxable-profits-2022#allowable-business-expenses-cash-basis-and-traditional-accounting mentions "Rent for business premises, business and water rates, light, heat, power, property insurance, security." Does "insurance" include both building and contents insurance? Also, do you have an answer for question 6, "Where an expense receipt has been lost etc. is a copy of a bank/credit card statement a sufficient substitute?" I appreciate your assistance.

Hi Oojafink,

In answer to question 3:

6. Allowable business expenses: cash basis and traditional accounting

Advises that ""Rent for business premises, business and water rates, light, heat, power, property insurance, security.

 If you use your home for business, the business proportion of the expenses or flat rate amount"".

 6) yes, provided it can be seen to related to the expense in question.

Thank you.