Rent-a-room tax question


O

Oppressed Subject

I live in a 4 bedroom house and only use one bedroom after my children
have moved on and my wife has passed away. To supplement my income and
fill an otherwise empty home I would like to rent out 3 rooms to med
students as I live near a teaching hospital. The combined rent will
exceed the government's tax free rent a room rental allowance.

Apart from being paid in cash (obviously a legal no-no), are these
viable options for not going over the rental allowance?

1) Reducing the cumulative rent to under the allowance, with the
remainder being paid as gifts (shopping vouchers, groceries, one off
cash gifts).
2) Separating the rent from all-inclusive to excluding bills, and
increasing their "utility bills" in lieu.

Do I have to declare my additional income if it remains below the tax
free allowance? I am a PAYE taxpayer and pay my incompetent Communist
mandarin overlords their monthly pound of flesh.
 
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B

Bartc

Oppressed Subject said:
I live in a 4 bedroom house and only use one bedroom after my children
have moved on and my wife has passed away. To supplement my income and
fill an otherwise empty home I would like to rent out 3 rooms to med
students as I live near a teaching hospital. The combined rent will
exceed the government's tax free rent a room rental allowance.

Apart from being paid in cash (obviously a legal no-no), are these
viable options for not going over the rental allowance?
You can go over the allowance (some £4250 per year), but you just pay tax on
the extra. You can't claim expenses however.

Or you can pay tax on the full amount of rent, but you can then subtract
expenses. Try and obtain the rent-a-room leaflet from the inland revenue.
1) Reducing the cumulative rent to under the allowance, with the
remainder being paid as gifts (shopping vouchers, groceries, one off
cash gifts).
2) Separating the rent from all-inclusive to excluding bills, and
increasing their "utility bills" in lieu.
One thing to watch for, I think the scheme assumes you are only renting a
single room, which doesn't exceed one third of the house, or some such rule.

I never paid close attention to this. You can always charge a huge amount
for one room, and have the other two rent-free..

Otherwise I guess you are outside the scheme, and pay tax as normal on this
extra income. But you might possibly incur capital gains tax when you sell
the house.
Do I have to declare my additional income if it remains below the tax
free allowance? I am a PAYE taxpayer and pay my incompetent Communist
mandarin overlords their monthly pound of flesh.
One of the ideas of the scheme is that you don't need to tell them about
rents below the threshold. Above that, you might need to fill in extra Land
& Property tax return pages (on self-assessment anyway).

And with 3/4 of your house rented, the local council may consider your house
to be a HMO (house multiple occupation) with regulations to comply with.
 
M

mogga

And with 3/4 of your house rented, the local council may consider your house
to be a HMO (house multiple occupation) with regulations to comply with.

Does HMO apply to B&B?
I heard that with 3 rented rooms or less you don't need to register it
as a business with the council.
 
B

Bartc

mogga said:
Does HMO apply to B&B?
I heard that with 3 rented rooms or less you don't need to register it
as a business with the council.
The entire HMO business is quite confusing. You might want to start here:

http://www.communities.gov.uk/housing/rentingandletting/privaterenting/housesmultiple/

Or google for HMO.

In my case (resident landlord with most rooms rented), a guy knocked on my
door, asked some questions, and said I had a HMO and the council would be in
touch. But I heard nothing more. However my property already had the fire
doors and some of the other requirements which would become necessary. This
was a few years back and since then licenses and whatever might now be
needed.
 
R

Ronald Raygun

Oppressed said:
I live in a 4 bedroom house and only use one bedroom after my children
have moved on and my wife has passed away. To supplement my income and
fill an otherwise empty home I would like to rent out 3 rooms to med
students as I live near a teaching hospital. The combined rent will
exceed the government's tax free rent a room rental allowance.

Apart from being paid in cash (obviously a legal no-no),
There's nothing no-no about being paid in cash, unless by doing so
you aren't going to pretend you received less than you actually did.
are these
viable options for not going over the rental allowance?

1) Reducing the cumulative rent to under the allowance, with the
remainder being paid as gifts (shopping vouchers, groceries, one off
cash gifts).
2) Separating the rent from all-inclusive to excluding bills, and
increasing their "utility bills" in lieu.
No, neither of the above. The rent-a-room allowance applies to *gross*
rent received, *inclusive* of anything received as expenses.
Do I have to declare my additional income if it remains below the tax
free allowance?
No, but if it's above the limit you can choose whether to pay tax on the
excess (i.e. the gross total actually received minus the allowance), or
instead to ignore the allowance and to pay tax on the actual profit, i.e.
the gross total received minus the expenses involved in provididng the
accommodation, which would include (in the case of 3 lodgers plus
yourself) a 3/4 share of all pooled bills. The pooled bills would
typically include food, council tax and insurance, and any mortgage
interest you're still paying.
 
R

Ronald Raygun

mogga said:
Does HMO apply to B&B?
I heard that with 3 rented rooms or less you don't need to register it
as a business with the council.
HMO rules aren't about registering a business, they're about needing to
apply for a licence, which will require upgrading the property to comply
with more stringent (mostly fire) safety standards than in a normal
dwelling.

B&B is a separate thing altogether, and may have its own independent set
of rules which apply instead of HMO rules, but a B&B doesn't generally
count as an HMO because people who stay there generally live elsewhere,
i.e. B&Bs are holiday accommodation. HMO rules don't count guests, they
only count residents.

The definition of an HMO (in Scotland, elsewhere YMMV) is a property
which is occupied by people who are members of more than two families,
but owners don't count. This means that an owner can have two lodgers
without the place counting as an HMO, but no more than two unless
they're related, so you could have four lodgers if, for example,
they're two couples.

But an owner with family not all of whom are co-owners (a couple might
co-own but their children would usually not) could only have one lodger
(or one lodging family), not two, because the owners' children would
count as part of one of the two permitted families (even if the owners
themselves are excluded from the count).
 
R

root

1) Reducing the cumulative rent to under the allowance, with the
remainder being paid as gifts (shopping vouchers, groceries, one off
cash gifts).
Great idea. I'm going to ask my employer not to pay me a salary,
instead they can BACS me a 'cash gift' on the last Friday of every
month so I don't have to pay income tax.

Foolproof.
 
P

PeterSaxton

Great idea.  I'm going to ask my employer not to pay me a salary,
instead they can BACS me a 'cash gift' on the last Friday of every
month so I don't have to pay income tax.

Foolproof.
I thought it was funny when the idiot said that receiving cash was a
no-no yet paying rent as gifts was ok!
 
D

David Woolley

PeterSaxton said:
I thought it was funny when the idiot said that receiving cash was a
no-no yet paying rent as gifts was ok!
Whilst I'd agree that those tactics wouldn't change the tax liability
and, if discovered, might cause HMRC to do a full tax audit, it is
interesting to note that US educational and scientific "charities" give
suggested donations for their merchandise, presumably to retain their
not for profit status!
 
O

Oppressed Subject

I thought it was funny when the idiot said that receiving cash was a
no-no yet paying rent as gifts was ok!
You're in no position to call me an idiot, you POS bean counter.

Your job as an accountant caters to an artificial demand which
wouldn't exist if it weren't for government's obsession with
convoluted tax laws and frankly at the end of your life your job would
not have done anything useful to contribute to humanity. I'd say even
a checkout girl, gardener or mechanic caters to a real demand unlike
you.

If you or your Polish (lol, explains a lot) wife can't do anything
useful with your life other than parasitise off a tax bureaucracy then
at least learn some manners before you clock out.
 
R

Ronald Raygun

Oppressed said:
You're in no position to call me an idiot,
Yes he is, actually, because your suggestion was, objectively
speaking, pretty daft. But despite being in the position to do so,
he should have refrained from it. It was rude.
you POS bean counter.
Oh dear, now who's being rude? He counts NEG beans too, you know.
Your job as an accountant caters to an artificial demand which
wouldn't exist if it weren't for government's obsession with
convoluted tax laws and frankly at the end of your life your job would
not have done anything useful to contribute to humanity. I'd say even
a checkout girl, gardener or mechanic caters to a real demand unlike
you.
Well, you did ask the question. You didn't add "please don't answer
this if you're an accountant", so even in your view they must be of
some use!
If you or your Polish (lol, explains a lot) wife can't do anything
useful with your life other than parasitise off a tax bureaucracy then
at least learn some manners before you clock out.
Steady on, pal. If you're going to hurl insults about like this, and
about his wife to boot, you're hardly in a position to lecture anyone
about manners.
 
O

Oppressed Subject

Yes he is, actually, because your suggestion was, objectively
speaking, pretty daft.  But despite being in the position to do so,
he should have refrained from it.  It was rude.
Take a look at Peter Saxton's posting history. It drips condescension
as though he thinks his position as an accountant has elevated him to
deity and woe on us who are ignorant about the wonders of tax
calisthenics.

As I have said, the fact of the matter is that accountants cater to
artificial needs which solely exist because of convoluted tax laws.
Otherwise, he would be out of a job and perhaps seeking work in a more
worthy profession.
Oh dear, now who's being rude?  He counts NEG beans too, you know.
One good turn, deserves another.
Well, you did ask the question.  You didn't add "please don't answer
this if you're an accountant", so even in your view they must be of
some use!
Or rather, I would say odious accountants who think they're godsend
and the best thing since sliced bread ought to Foxtrot Oscar.

I would learn accounting except I see no need to learn about the
pretzels of human taxation that are simply a contrivance of Communist
bureaucracies that seek to create unnecessary non-jobs and fund their
wasteful spending.

Tax as it is, is too much and unnecessarily complex.
Steady on, pal.  If you're going to hurl insults about like this, and
about his wife to boot, you're hardly in a position to lecture anyone
about manners.
He is fully deserving of my scorn, particularly since he seems to
think so highly of himself.

LOL, I challenge Polska Saxton name me *one* significant contribution
accountants have made to society.
 
P

PeterSaxton

Take a look at Peter Saxton's posting history. It drips condescension
as though he thinks his position as an accountant has elevated him to
deity and woe on us who are ignorant about the wonders of tax
calisthenics.

As I have said, the fact of the matter is that accountants cater to
artificial needs which solely exist because of convoluted tax laws.
Otherwise, he would be out of a job and perhaps seeking work in a more
worthy profession.



One good turn, deserves another.



Or rather, I would say odious accountants who think they're godsend
and the best thing since sliced bread ought to Foxtrot Oscar.

I would learn accounting except I see no need to learn about the
pretzels of human taxation that are simply a contrivance of Communist
bureaucracies that seek to create unnecessary non-jobs and fund their
wasteful spending.

Tax as it is, is too much and unnecessarily complex.



He is fully deserving of my scorn, particularly since he seems to
think so highly of himself.

LOL, I challenge Polska Saxton name me *one* significant contribution
accountants have made to society.
Remember, you were the person who made the ridiculous comments about
cash and "gifts".

You seem to think accountants only deal with tax. Is tax that bad? How
do you suggest that the armed forces and the police should be funded?

Plenty of accountants deal with preparation of statutory accounts,
management accounts, payroll, business plans, cash flow forecasts,
etc.

Nobody has to use my services. They use them because they judge they
are useful to them.

What is it that you do that's so useful?

Obviously you don't know my wife. You seem like one of these people
who thinks that a lack of knowledge is no reason to refrain from
having an opinion. It's worth remembering that people will treat your
opinions with the respect they deserve.

You don't seem a very happy fellow.
 
A

Alan Ferris

Obviously you don't know my wife. You seem like one of these people
who thinks that a lack of knowledge is no reason to refrain from
having an opinion.
Like what you did when making comments because you never worked out
what I do for a living.

Hypocrisy has a habit of comming back to haunt you.

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"The right to be let alone is indeed the beginning of all freedom"
Supreme Court Justice William Orville Douglas
 
P

PeterSaxton

Like what you did when making comments because you never worked out
what I do for a living.

Hypocrisy has a habit of comming back to haunt you.
Why should I work out what you do for a living? If you are too ashamed
to tell that is your business.
 
O

Oppressed Subject

Remember, you were the person who made the ridiculous comments about
cash and "gifts".
I have the utmost respect for the laws of nature and morality. In
terms of ethics, two people are entitled to give financial gifts to
each other and I am entitled to charge lower than market rent to a
friend. What so wrong about that?
You seem to think accountants only deal with tax. Is tax that bad? How
do you suggest that the armed forces and the police should be funded?
Most tax is superfluous. The only legitimate tax-funded state entities
should be the armed forces and parts of the judiciary. There is no
need for police as armed human collectives will eventually settle down
into an equilibrium.
Plenty of accountants deal with preparation of statutory accounts,
management accounts, payroll, business plans, cash flow forecasts,
etc.
Oh dear, you're really scraping the bottom of the barrel there to
justify your profession's existence. Let me say for a fact that none
of what you mentioned can exclusively be done by an accountant but
rather anyone with a smattering of intelligence can do it too.

My eldest son had a keen ear and listened to his father's advice to
not be subservient to other people as an employee. He now runs a SME
and initially did the accounts himself, getting an accountant to only
rubber stamp it. He did not qualify as an accountant but learnt the
ropes himself.

And I certainly didn't need an accounting degree to balance my own
personal accounts. All it took was a little bit of grey matter.
Nobody has to use my services. They use them because they judge they
are useful to them.
No, they use your services because they have to. Don't delude yourself
over that. Do you think your job would exist in a less convoluted tax
system?
What is it that you do that's so useful?
I was a combat engineer when I was much younger. After bleeding one
time too many for this great and wonderful country I left the armed
forces with a nod from my superiors. I impressed the right people and
brought my practical knowledge to continue work in a related field.
Obviously you don't know my wife. You seem like one of these people
who thinks that a lack of knowledge is no reason to refrain from
having an opinion.
I've met enough Polskas in my life to know to never trust one as far
as I can throw them and to have an opinion or two about Polska
manners.
It's worth remembering that people will treat your
opinions with the respect they deserve.
Do you think I care about respect?

LOL, what could you possibly say to me that would make me feel
unworthy? Please try.

I am satisfied that I have lived a fulfilled and productive life, and
even in my relative fiscal poverty I'm a damn sight wealthier than
even Fred the Shred with his ill-gained millions. You couldn't pay me
enough to live his life.
You don't seem a very happy fellow.
Meeting someone who does a non-job is just another daily annoyance.
Meeting someone who does a non-job and has the cheek to be arrogant
about it, is another.

Go pick up a cause like animal rights, recycling or tree hugging. It
might give some justification to your pathetic existence, as you're
certainly not getting that from your job, lol.
 
P

PeterSaxton

I have the utmost respect for the laws of nature and morality. In
terms of ethics, two people are entitled to give financial gifts to
each other and I am entitled to charge lower than market rent to a
friend. What so wrong about that?
I'm sure you know. You would rather just not admit the truth.
Most tax is superfluous. The only legitimate tax-funded state entities
should be the armed forces and parts of the judiciary. There is no
need for police as armed human collectives will eventually settle down
into an equilibrium.
You don't seem to have any common sense in your comments.
Oh dear, you're really scraping the bottom of the barrel there to
justify your profession's existence. Let me say for a fact that none
of what you mentioned can exclusively be done by an accountant but
rather anyone with a smattering of intelligence can do it too.
Plenty of people come on here saying they know enough about this and
that but they get found out.
My eldest son had a keen ear and listened to his father's advice to
not be subservient to other people as an employee. He now runs a SME
and initially did the accounts himself, getting an accountant to only
rubber stamp it. He did not qualify as an accountant but learnt the
ropes himself.
Are you an employee?

So you are saying he learnt everything you would need to know to
prepare statutory accounts simply to prepare one set of accounts?
Sounds pretty stupid to me.
And I certainly didn't need an accounting degree to balance my own
personal accounts. All it took was a little bit of grey matter.
I think "balancing" says all I need to know about how limited your
knowledge is.
No, they use your services because they have to. Don't delude yourself
over that. Do you think your job would exist in a less convoluted tax
system?
They don't have to.
I was a combat engineer when I was much younger. After bleeding one
time too many for this great and wonderful country I left the armed
forces with a nod from my superiors. I impressed the right people and
brought my practical knowledge to continue work in a related field.
I can tell that you strive to impress by words rather than deeds.
I've met enough Polskas in my life to know to never trust one as far
as I can throw them and to have an opinion or two about Polska
manners.
You don't think that they maybe they have rumbled you steer a wide
berth.
Do you think I care about respect?
I think you do because you come on here trying to impress but make
yourself look stupid.
LOL, what could you possibly say to me that would make me feel
unworthy? Please try.
I don't have to. It's within your own mind.
I am satisfied that I have lived a fulfilled and productive life, and
even in my relative fiscal poverty I'm a damn sight wealthier than
even Fred the Shred with his ill-gained millions. You couldn't pay me
enough to live his life.
You think anybody believe any of your bullshit?
Meeting someone who does a non-job is just another daily annoyance.
Meeting someone who does a non-job and has the cheek to be arrogant
about it, is another.

Go pick up a cause like animal rights, recycling or tree hugging. It
might give some justification to your pathetic existence, as you're
certainly not getting that from your job, lol.
I'll carry on with my life as it is thank you. Every now and again
you'll pop up, spout some rubbish, and see an opportunity to deflect
your thoughts from your down-trodden existence and, with the help of
the computer, tell the world how wonderful you are.
 
A

Alan Ferris

Why should I work out what you do for a living? If you are too ashamed
to tell that is your business.
I would have stated it if you asked, but you preferred insults at the
time. Why should I now bother to enlighten somebody who prefers
insults to education?

--
Ferrit

()'.'.'()
( (T) )
( ) . ( )
(")_(")
"The right to be let alone is indeed the beginning of all freedom"
Supreme Court Justice William Orville Douglas
 
S

southwell.p

Most tax is superfluous. The only legitimate tax-funded state entities
should be the armed forces and parts of the judiciary.
So you pay for your own private ambulances and expect to pay before
anybody puts out a fire for you. I sometimes wonder at the education
people are receiving these days.
 
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P

PeterSaxton

So you pay for your own private ambulances and expect to pay before
anybody puts out a fire for you.  I sometimes wonder at the education
people are receiving these days.
I suppose in his world the prime minister is paid for privately, too!
It's obvious this guy doesn't have a clue about life but lives in his
own little dream world.
 

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