Not eligible for self-employment grant because I also had property income!

by Readers Question

10:04 AM, 12th May 2020
About 3 months ago

Not eligible for self-employment grant because I also had property income!

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Not eligible for self-employment grant because I also had property income!

I am also self-employed and completed the “Am I Eligible” for the Covid-19 self-employment grant.

Got turned down as the profit from property over the last 3 years (even though I got a £1 tax rebate for 2018-19) was more than the profit from self-employment for the last 3 years.

Grossly unfair as this “income from property” is what I use to live on (food shopping etc) as well as for paying the upkeep on the rental property and service/maintenance charges. Especially as the tenant is refusing to pay the rent now she is on a Periodic Tenancy as self isolating in Wales (the lockdown extended till 29th May at least) .

HMRC need to consider small portfolio private landlords “income from property” as self-employed income.

Perhaps in future I should invoice myself for the decorating, repairs, cleaning etc that I do at the property and put it under “self-employment”?????

Judith



Comments

Neil Patterson

10:08 AM, 12th May 2020
About 3 months ago

Have you tried for a Business Bounce Back loan as they are based on a maximum of 25% of turnover not profit.
Assuming you run a business account with a bank?

Judith Wordsworth

23:07 PM, 12th May 2020
About 3 months ago

Reply to the comment left by Neil Patterson at 12/05/2020 - 10:08
Not running the portfolio of 2 properties with a business bank account. I was looking for the Self Employed grant not a repayable loan.

Many small private landlords are letting property for income, if we're lucky.

Paul

9:56 AM, 13th May 2020
About 3 months ago

No help but there are lots who fall through the gaps I am afraid. My wife retired to live off the property income April, my brother started self employment in April 2019. There are others who are abusing the measures,whether furlough , tenants ... Whether there will be subsequent balancing of the books when things settle we can only hope.

jonr

10:19 AM, 13th May 2020
About 3 months ago

Yep, I'm in the exact same position as you Judith. I'm afraid I can't find a solution either. My total income last month was £324 and I'll still have to fund maintenance and insurance payments etc. in the coming weeks and months.

In 'normal times' I'd be expected to sell my property to raise funds to live on before being able to claim UC or anything but with the eviction ban I can't get my property back to do that so am sort of stuck.

I feel for those who are having to live on £96 a week sick pay for instance but their situation is better than mine.

Fingers crossed that we don't see a second spike and more restrictions can be relaxed soon...

Jaye

11:05 AM, 13th May 2020
About 3 months ago

Govt don't really care about landlords. They are happy to open shop for Estate agents just so they can get their stamp duty funds. They need to do more especially for those who are experiencing tenants taking advantage of the system.

Rbinscotland

12:05 PM, 13th May 2020
About 3 months ago

Just had a chat to HMRC and only on here to confirm. That if you only own property and do not work elsewhere ( i.e. Income is only from property) You are Self employed for Tax purposes. Filling out your Tax return. However for the income( sorry rent received) this goes into a supplementary page and for this scenario you are not self employed. You have an option to become a handyman and chargeback you equivalent to "rent received" after Expenses. To have a 0 "zero" tax position. ( They never actually suggested that but had suggested an accountant or shrewd person may want to discuss further. So long and short at the moment you don't include income as income for paying your bills. Whether they are business invoices or personal bills.

Judith Wordsworth

14:18 PM, 13th May 2020
About 3 months ago

Reply to the comment left by Rbinscotland at 13/05/2020 - 12:05
Many thanks.

Joe Kay

7:33 AM, 14th May 2020
About 3 months ago

I already do bits of handyman for couple of rentals but don't reclaim on tax. Are there limitations on how much you can do and earn against what your rental income is?

Rbinscotland

11:04 AM, 18th May 2020
About 3 months ago

Reply to the comment left by Judith Wordsworth at 12/05/2020 - 23:07
Hi Joe. Not sure where to turn..... ( im in the same boat as yourself) Did you get any defined answer. probably from HMRC and not keyboard virtual knowledge! I left a good paying job to be "i Thought" self employed". I had bought property and spent my time, money working on them to rent them out for profit. Profit - the 64 million question. I distictly remember saying to HMRC, with ragerd completing the SA form. Do I put this in Profit ( my profit) or under profit from property?
I was told profit from proerty or i would be double counting it in both causing a double if not more ( 40%) taxable amount. It was followed up and I did think about it as long as its recorded im sure its OK under profit from property. Because as far as I see it no difference in personal allowances etc would effect the bottom line.
However, I was suggested ( last week, during lockdown) by HMRC to put in a handyman / administrator fee as an invoice to show profit as a person not a profit from property. Again... the end result is not any different unless we have a Covid style issue again. The invoice reduces my Profit from property and reduces the tax burden, but i'm assuming itll increase my tax burden equally. But the Personal allowance doesnt change and the net result the same.
I tried to point out to HMRC
1. I left a good job to run my business because there wasnt enough time in the day to do both. So i decided Ill work for myself.
2 I registered as self employed since about 2008 - self employed letting landlord or sole trader. Butit seems it doesnt count.
Personal allowance and tax returns have a net effect but HMRC asking me to fiddle them ( create an invoice to cover my work)
cannot get a difinative answer either looking at different property website, speaking to HMRC or CAB or an accountant. Any help ?


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