Mark McLaughlin looks at the potential liability to National Insurance contributions for individual landlords on rental income profits.
Individuals who are landlords are not normally liable to National Insurance contributions (NICs) on rental profits, unlike self-employed individuals carrying on a trade.
However, in some cases HMRC may seek to impose NICs charges on landlords.
Not trading income
Self-employed individuals living and working in the UK are generally liable to Class 4 (and Class 2) NICs. Self-employed individuals whose net profits or gains are chargeable to income tax (as trading income) are generally liable to Class 4 NICs, provided those activities are not carried on wholly outside the UK. This general rule is subject to certain exceptions (e.g., those under the age of 16 or over state pension age at the beginning of the tax year).
