Can a prop landlord employ w/o being self emp himself ?

[landlord1234]

Hi,

Can a landlord with a number of properties (say 10), who declares their rental income using property section of the self assessment form, but who is not a sole trader employ somebody to help with dealing with tenants and minor repairs ?

and if so, would the monies paid be allowable expenses against rental income ?

or would it be necessary to operate as a sole trader / company to do so ?

http://www.hmrc.gov.uk/employers/employing-someone.pdf appears to suggest that to register as an employer you need to be either

- sole trader
- partnership
- Ltd company

but elsewhere on hmrc I read about individuals being able to employ carers / nannies etc without being a business.

Regards

[mullet]

Anyone can employ anyone else (obviously having regard to employment law and minimum wage issues etc). You will be required to operate PAYE as appropriate. The overall cost of the employee (either gross pay plus employer's NICs or net pay plus all PAYE liabilities) will be allowable against your property income if it is wholly and exclusively incurred for the purposes of the property "business".

[landlord1234]

Thanks for the reply.

I'm looking at hmrc guidance notes for property income

http://www.hmrc.gov.uk/worksheets/sa105-notes.pdf

I can't see anywhere to declare salaries paid , box 26 or 27 maybe ?

[mullet]

Don't get too hung up about which item of expenditure goes in which box. The important thing is to get the amount of taxable profit (or allowable loss) right. But once you have decided on a particular box, it's best to stick with it from year to year so that HMRC can see a logical pattern if they (it's done by computer) risk assess your return.

You could choose any of boxes 23, 26 or 27. Whatever fits best.

[landlord1234]

Thanks again.

As a landlord , tax is payable on the 'rent after expenses, but no NI is payable , correct ?


If a landlord then employs someone , is he not then classed as self employed and liable for NI on the profit as well ?

or is the salaries paid just another expense like those paid to agents and for repairs ?


Also ....

If a landlord did some self employed work would he/she onl;y pay NI on that income or on all his/her income including the rental income ?

[section 44]

As a landlord , tax is payable on the 'rent after expenses, but no NI is payable , correct ?

Correct, although clearly employer's NI may be due if the landlord has employees.

If a landlord then employs someone , is he not then classed as self employed and liable for NI on the profit as well ?

Who's "he", the landlord or the employee? In any event, neither would be self-employed merely as a result of the landlord employing someone.

or is the salaries paid just another expense like those paid to agents and for repairs ?

Correct.

If a landlord did some self employed work would he/she onl;y pay NI on that income or on all his/her income including the rental income ?

Rental profits are not earned and therefore not subject to NI.

[landlord1234]

I am trying to register as an employer to then take somone on

When I call the registration line, they are insisting I have to be a sole trader, company or partnership.

When I explain that my income comes from property, they say I need to be a sole trader, which I haven't been and have submitted SA forms for many years without problems.

I want to employ someone , but not if it means changing my own status.

Is there a problem here , or are the people who anser the phone only able to deal with certain cases ?

Thanks

[King_Maker]

I assume there are good reasons for taking on an employee?

In these circumstances, an independent contractor can be less hassle.

What is the employee going to be doing?

[landlord1234]

dealing with tenants, minor repairs and dealing with contractors (elecs , gas fitters etc) , just general support.

I don't like using estate agents for this, would rather do it myself or get someone I know to do it.

[King_Maker]

Would he/she be doing any work for you in a personal capacity?