Full time Trader. Self employed or not ?

[No Sea to Rough]

Hi all,

A bit of advice please. Although this is a big subject, is anyone aware of any links or information that may be of interest.

I was wondering where F/T traders stood on being self-employed etc, or what the options are in respect of Tax and National Insurance Contributions.

Is anyone aware of any Accountants who are niche in this area ?

Any advice no matter how small would be very useful.

Many thanks

[mcfc1981]

i went to see an accountant few years back, u dont pay any tax but should pay National Insurance.
i also know when u claim tax credits the income is classed as zero.

[LeTiss]

I don't pay income tax. I pay class 2 National Insurance. I pay the flat rate, as I don't have any salary to declare. Premium Charge is something I can stomach, as it just means I pay BF what I would be paying the taxman instead. The disadvantages are that it has an impact on your credit rating, but I just keep putting all my shopping and petrol on credit cards and then paying them off monthly, just to show I'm financially active.

Initially, I declared myself as self-employed, but when it came to self assessment the inland revenue declared my earnings as £0. They saw my trading as being professional gambling, due to the fact that some will lose money from it. However, if I took money from others relating to my trading, or through charging for my advice, I'd pay tax on those earnings

[Photon]

HM Revenue & Customs doesn't recognising betting is a trade even if you're have good system or you profit consistantly from it.

Their interepretation of a bet is:
A bet is merely an irrational agreement that one person should pay another person on the happening of an event.

So you're not technically self-employed but not in employment. As others have said do pay NI as it will count towards your pension. However, the biggest downside is as LeTiss mentioned is credit rating especially buying or moving a house can be tricky without a recognised income source.

[andyfuller]

u dont pay any tax but should pay National Insurance.

National Insurance contributions are voluntary as far as I am aware when you are classed as unemployed. So it depends if you want to build up your qualifying years assuming that there is a National Pension scheme when you come to retire...

[superfrank]

Their interepretation of a bet is:
A bet is merely an irrational agreement that one person should pay another person on the happening of an event.

many of my bets are irrational agreements

sounds like you could apply the above to financial trading. does anyone know why it is treated differently (trading that is, not investing)?

I don't pay NI atm, what are the consequences of that?

I have a final salary pension from old employer.

[andyfuller]

I don't pay NI atm, what are the consequences of that?

You have to have enough qualifying years to get the state pension. The requirements vary depending upon when you were born so you could need more or less than me so no point giving advice here, best to look for yourself as only you know your circumstances.

I found the National Insurance people really helpful when I dealt with them. I had a few years I could top up by less than £100 that made them into qualifying years so I did that but then stopped paying as there made no financial sense to as I have plenty of time left to get my qualifying years. If you have more qualifying years than you need it makes no difference to what you get, you just have wasted money imo.

Also again it may vary but for me it isn't a case of get it or not get it. If you have 60% of the qualifying years I would get 60% of the State Pension.

Don't treat what I say as gospel but look into it yourself as everyones circumstances are different but these two guides are good starting points:

1. State Pensions:

http://www.moneysavingexpert.com/savings/state-pensions

2. Pay to boost your retirement income:

http://www.moneysavingexpert.com/reclai ... e-pensions

If you feel that the state pension will be long since gone by the time you come to retirement then it doesn't make sense to pay anything into it if you don't have to.

[No Sea to Rough]

Thank you very much for your comments everyone. This is all very helpful. Sounds like NI contributions is the way to go and regular use of credit card.

[JonBet]

Can someone explain why the use of credit card is import? vs standard debit card?

Thanks

[andyfuller]

Not sure why such an old thread was dragged up but:

A debit card uses the money directly out of your bank account so is not a form of credit so won't help show you are financially responsible with credit.

A credit card is used for spending on credit which you should pay off in full each month so as to not incur interest payments whilst at the same time showing you are good with credit.

People who have no form of credit often find it difficult to get a mobile phone for example on a monthly plan as they have no credit history so there is no way of knowing if they are financially a 'good risk'. You will often hear such people say, but i have never been in debt. That is the whole problem, the is no form to base a decision on.

HTH.