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The previous accountant of a new client showed the income and expenditure relating to five let properties as being from self-employment. The presumption is it should be shown as income from property
I have a client who rents out five properties. He is responsible for collecting the rents and any maintenance required on the properties but if he is unable to carry out any repairs himself he engages subcontractors.
His previous accountants prepared a profit and loss account and a balance sheet for each year and they declared the income from this source on the self-employment pages. Consequently he also pays class 2 National Insurance contributions (NIC).
I am a little nervous as to the previous approach to this income. Would I be wrong in entering his details on the land and property pages of his future tax return instead of the self-employment pages and are there likely to be any adverse consequences of such a change?
What are the advantages and disadvantages of the client not being treated as self-employed?
Finally is he entitled to a rebate...
