Are there any disadvantages of becoming a self-employed landlord?

Are there any disadvantages of becoming a self-employed landlord?

8:45 AM, 10th September 2015, About 7 years ago 3

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I have one property which I self manage. I am thinking of registering as a self employed landlord but I am not sure if I am eligible with just one property, or if there are any disadvantages of doing this, other than having to pay National Insurance Class 2 contributions.Calvin

My reasoning is that I think I would be able to claim back some of my part time childcare costs in the country where we live if I had an official ‘job’ for two mornings a week, rather than just managing the property in my spare time and on an ad hoc basis. The rest of the week I am a full time mum.

I usually fill in a self assessment UK tax return but I don’t actually pay any tax on the rental income because the profit comes way under my annual tax-free allowance in the UK. I am a UK tax resident because I spend a lot of time in the UK seeing family.

Would anyone be able to advise me if registering as self employed would be legal for me, and if there could be any pitfalls? The childcare costs will only be an issue for the next couple of years – would there be a drawback to having registered as self employed, after I cease to gain this financial benefit from it? Would I still get tax relief on the mortgage interest? And if I in the future employ a lettings agent to manage the property, could I still be self employed?

I’m happy to pay for professional accountancy advice if I need it, I just wasn’t sure if this is an avenue worth pursuing.

Thank you for your help.



Mark Alefounder

10:37 AM, 10th September 2015, About 7 years ago

Hi Rebecca. I would suggest that this is something that can only be determined by someone who is aware of your overall financial position. If you have an Accountant already then by all means chat to them but you may be better off finding a Tax Adviser on this one.

In addition I always think having your existing finances reviewed is absolutely vital. As a Financial Adviser myself we meet so many people who don't really know their financial circumstances well enough to be able to make some of the decisions you are looking to make so perhaps a Financial Review as your starting point makes sense.

Rebecca 1980

19:10 PM, 12th September 2015, About 7 years ago

Reply to the comment left by "Mark Alefounder" at "10/09/2015 - 10:37":

Thanks Mark, I think you're right. I'm going to start with some tax advice where we are, then find someone in the UK to review our finances.


14:06 PM, 13th September 2015, About 7 years ago

You definitely need professional advice - but my three ha'p'orth opinion is that registering for self-employment relates to a trade or business and being a landlord is a property business and treated differently for tax so registering as self-employed is not applicable (and would probably not entitle you to the childcare cost relief). How many properties is not relevant and the NI would also not be required.

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