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bigduckontax
bigduckontax, Accountant
Category: Tax
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Recently started renting out my house in London and live &

Resolved Question:

Recently started renting out my house in London and live & work abroad for more than 8 years.I understand broadly the tax obligation and the letting’s agent has been deducting tax (I have the certificate NRL6).However, as I am now earning money from the UK, I’m not so sure if I need to pay NI contributions, and if so how much (i.e. what are the thresholds/percentages)?As said I live and work abroad, but as I am still a UK citizen so want to confirm if this something I need to take care of.Also worth noting that this year I started paying voluntary contributions for NI as "Class 2" per month to ensure I have enough years to qualify for a pension and hopefully that is enough.
Submitted: 1 year ago.
Category: Tax
Expert:  bigduckontax replied 1 year ago.

Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.

Yes, you will, you should warn off your tax office of your new venture. Of course, with a net income of under the Personal Allowance of 11K for the 16/17 tax year, you still will not have any Income Tax (IT) liability although there may be some Class 2 National Insurance (NI) to pay as the income is over GBP 5966. Your statement when you self assess will tell you of any liability in this matter. However paying NI is complicated if you run a business involving land or property which is part of your activities. I would be inclined to draw your tax office's attention to the position when you advise them of your landlord's activities (see above) and see how HMRC would like the matter handled.

When you left the UK did you send a Form P85 to HMRC? If you did not you should do so immediately. Fortunately there is no time limit as to its submission, it is available on the web and can be filed on line. On receipt HMRC will class you as non resident and you will find dealing with them much easier. Once classified as non resident you can visit the UK up to 91 days in any one tax year without breaching your non resident status.

Paying NI is a good idea to protect your State Pension position. These days you need 35 years of contributions to achieve a full SP.

Always remember to check HMRC's computation after you self assess. That Department is notorious for getting hold of the wrong end of the stick if they can even find the stick at all. I recall on one occasion notifying them of a GBP 420 capital loss which they promptly added to my income!

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Expert:  bigduckontax replied 1 year ago.

Thank you for your support.