Rent a room scheme vs declaring rental income

barnaby-bear

barnaby-bear wrote: »

Do you rent the room with all bills included. I think if you split it so the rent is lower but then you split the bills as in a house share it isn't rental income - just the lodgers paying their share of the services they are using. I don't think the expenses can be offset and still use the rent a room scheme - you already have a tax discount in that I think it might be an either / or.

http://www.spareroom.co.uk/content/info-landlords/rent-a-room-more/
"If you let out property you can deduct certain expenses and tax allowances from your rental income (unless it's under the 'Rent a Room' scheme)"

Had a memory of such a caveat

heather_helo

theartfullodger wrote: »

Heather:

£5 to your nominated, registered, charity if you are correct. Which chapter are you on??

Cheers!

Lodger

app acca studdy guide - f6 taxation for exams in 2009 - chapter 6 re poperty income - point 3.2 - alternative basis -

also look at opentuition.com - f6 tax

heather_helo

heather_helo wrote: »

app acca studdy guide - f6 taxation for exams in 2009 - chapter 6 re poperty income - point 3.2 - alternative basis -

also look at opentuition.com - f6 tax

im pritty sure im right cos one of the questions is to work out wich option is the better option to do, and the fiver goes to cancer reasurch uk. :j

would recomend working out both options before you declair anything to the tax man.
thanks xxx

tbs624

heather_helo wrote: »

..... the aternative is to be self employed.....

No it isn't - rental income is classed as "unearned income" - see Artful's post on the use of SA105

Lady_Lea

Some of my clients work this a different way. I have never questioned it. But it is an interesting theory. I only supply the tenants - I don't do their accounts lol.

They have two tenants living in their home, as lodgers. They would go over the £4250 if they charged normal rent.

What they do is charge a lower rent, and then ask for a seperate contribution for their share of the bills (the total coming to the actual amount they want for their room)

I'm really not sure if it is ok to do .... but like I said - an interesting way of looking at it.

tbs624

Lady_Lea wrote: »

Some of my clients work this a different way. I have never questioned it. But it is an interesting theory. I only supply the tenants - I don't do their accounts lol.

They have two tenants living in their home, as lodgers. They would go over the £4250 if they charged normal rent.

What they do is charge a lower rent, and then ask for a seperate contribution for their share of the bills (the total coming to the actual amount they want for their room)

I'm really not sure if it is ok to do .... but like I said - an interesting way of looking at it.

For someone whose user name would suggest that she apparently has a history within property letting, playing the "I'm not really sure if it is ok to do" line seems a little odd? See here folks

That figure of £4250 is a *gross* figure - any other money received from your lodger in respect of their use of the property takes you over the amount and has to be declared for tax purposes.

Matt_Hutchinson

BitterAndTwisted wrote: »

I'm not sure you actually need a tenancy agreement for a lodger as they have far fewer rights than an actual tenant, but it's fair to set out some basic rules so you both know where you stand.

Although you don't need an agreement for a lodger I'd strongly recommend you get one anyway as it's good to have something in writing that protects you both. As a live-in landlord the law recognises that you're more vulnerable than a standard landlord and does more to protect you as a result but a contract should still be something you consider essential rather than optional.

You can buy a ready made lodger agreement cheaply enough online.

Matt

Lady_Lea

Do you spend all day following people around ripping them to shreds for fun?

what does tbs624 username mean? "to be stalking" ?

tbs624

Get over yourself Lea. We clearly both have an interest in HBR&S otherwise we wouldn't be using this Board, so it stand sto reason that we will both read the same threads at some point.

I have responded to the grand total of three of your posts ( out of 19) - the one above because HMRC would disagree with you , and the two others because they were posts in which you sought to direct other posters to websites from which you personally make money, but you failed to declare your interest.

See up at the top: Don't post links for personal gain. Except in the referrers section and always declare any interest.

Lady_Lea

tbs624 - so instead of posting links to things about my PAST personal life - why did you not be decent and contact me direct and say what you have just said there?

Please can I ask you to edit your post and remove the link. I have taken on board your comment. You do not need to get personal.