Wifes part time job + BTL taking her into Tax and NI?
Discussion
My wife has a part time job, and now has a half share in a BTL, so this year she may well be liable for income tax (can't be sure until the tax year is up). We've notified the Tax man she needs a self assessment tax form so thats covered.
She will also go above the point where she needs to pay NI, so do we have to notify anyone else, or is that dealt with by submitting the Self Assessment?
With regard to the BTL profit, is that classes as income for NI purposes? I know its recorded in a seperate section on the tax form, but I don't think its actually treated any differently for tax purposes, so I would assume the same for NI?
She will also go above the point where she needs to pay NI, so do we have to notify anyone else, or is that dealt with by submitting the Self Assessment?
With regard to the BTL profit, is that classes as income for NI purposes? I know its recorded in a seperate section on the tax form, but I don't think its actually treated any differently for tax purposes, so I would assume the same for NI?
Rental income is NOT income for NI purposes.
NI is charged on EARNED income (i.e. income derived from some sort of work, such as an employment or a self employment). Rental income is classified as INVESTMENT income (i.e. income derived from an a asset, such as a bank deposit account, stocks and shares or land and buildings).
If her employment income is below the NI threshold, she will pay no - NI IN THAT JOB.
If she had another job (doesn't matter if an employment or self employment) and her income from that job is ALSO below the NI threshold, she pays no NI there either.
NI is calculated on a job by job basis, unlike Income Tax which is based on overall income from all sources.
But income from investments is never taken into account for NI purposes.
NOT paying NI may not be desireable, however. Her ultimate state pension entitlement will be based on her overall contribution record over her working life. If she wants to make VOLUNTARY contributions, she can set up Class 3 NI payments.
NI is charged on EARNED income (i.e. income derived from some sort of work, such as an employment or a self employment). Rental income is classified as INVESTMENT income (i.e. income derived from an a asset, such as a bank deposit account, stocks and shares or land and buildings).
If her employment income is below the NI threshold, she will pay no - NI IN THAT JOB.
If she had another job (doesn't matter if an employment or self employment) and her income from that job is ALSO below the NI threshold, she pays no NI there either.
NI is calculated on a job by job basis, unlike Income Tax which is based on overall income from all sources.
But income from investments is never taken into account for NI purposes.
NOT paying NI may not be desireable, however. Her ultimate state pension entitlement will be based on her overall contribution record over her working life. If she wants to make VOLUNTARY contributions, she can set up Class 3 NI payments.
Eric Mc said:
Rental income is NOT income for NI purposes.
NI is charged on EARNED income (i.e. income derived from some sort of work, such as an employment or a self employment). Rental income is classified as INVESTMENT income (i.e. income derived from an a asset, such as a bank deposit account, stocks and shares or land and buildings).
If her employment income is below the NI threshold, she will pay no - NI IN THAT JOB.
If she had another job (doesn't matter if an employment or self employment) and her income from that job is ALSO below the NI threshold, she pays no NI there either.
NI is calculated on a job by job basis, unlike Income Tax which is based on overall income from all sources.
But income from investments is never taken into account for NI purposes.
NOT paying NI may not be desireable, however. Her ultimate state pension entitlement will be based on her overall contribution record over her working life. If she wants to make VOLUNTARY contributions, she can set up Class 3 NI payments.
Many thanks, and a very good point made about voluntary contributions. She's not needed to contribute for a while as she's been bringing up our children. now they are old enough she's taken up employment again.NI is charged on EARNED income (i.e. income derived from some sort of work, such as an employment or a self employment). Rental income is classified as INVESTMENT income (i.e. income derived from an a asset, such as a bank deposit account, stocks and shares or land and buildings).
If her employment income is below the NI threshold, she will pay no - NI IN THAT JOB.
If she had another job (doesn't matter if an employment or self employment) and her income from that job is ALSO below the NI threshold, she pays no NI there either.
NI is calculated on a job by job basis, unlike Income Tax which is based on overall income from all sources.
But income from investments is never taken into account for NI purposes.
NOT paying NI may not be desireable, however. Her ultimate state pension entitlement will be based on her overall contribution record over her working life. If she wants to make VOLUNTARY contributions, she can set up Class 3 NI payments.
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