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Rent a room scheme - what bills must be included?
Comments
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I have stuck with the rent a room method because I am not sure about what is reasonable to count as expenses
If you were living in a shared house you would normally divide the bills evenly between all tenants. If you want to charge your brother less than this that's great, but I would consider the difference to be a gift to your brother.eg. council tax: why should you claim against 50% when an extra person in the property only adds 25% to the cost?
Actually it's a third extra due to the way percentage's work. I think martin's got a page explaining this with cake somewhere - basically split a cake into four pieces, and if you're a single person you only have to pay for three of them. If you add the extra piece though that increase is in relation to the three pieces you had before - not the four pieces of a whole cake.Note: Unless otherwise stated, my property related posts refer to England & Wales. Please make sure you state if you are discussing Scotland or elsewhere as laws differ.0 -
I have stuck with the rent a room method because I am not sure about what is reasonable to count as expenses
eg. council tax: why should you claim against 50% when an extra person in the property only adds 25% to the cost?
Fuel: I don't think my fuel bills have doubled by having an extra person here
Maintenance: I am not spending double the amount on house maintenance just because I have a lodger
it’s not extra costs you can claim, but a fair allocation of costs.
If there are 2 people in the house, it’s fair to allocate half the costs to him.
This follows from HMRC's guidance on running a business in the home (in this case a rental business).
See the following for more detail
http://www.hmrc.gov.uk/manuals/bimmanual/bim47820.htm
As always with HMRC is rather vague, but it is right...
(as I always say though, if you want professional advice, pay someone for it)0
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