Exchange students and tax credits

sorryitsme

If someone is in reciept of TC's and they occassionally have foreign students stay for a week at a time how does this affect TC. Is it deemed as a SE job and hours and profit need to be calculated and given to TC?

Does this came under the rent a room scheme?

This is something that I am thinking of doing in the future and want to make sure I do things correctly.

Thank you in advance

[Deleted User]

A quick tele call to the tax credits helpline will get you the answer to this one

sorryitsme

Not too sure how quick that telephone call will be whilst on hold waiting to speak to someone lol.

AnxiousMum

If you are going to set up a business doing this, you'd want to make sure that you are covered for all eventualties with your insurance etc. You may find that it's not worth setting up as a business at all. My sister in law does this overseas - is paid about $600 CDN per month, and there it's not considered income, its considered a payment for providing for the needs of the student. Don't know how it works here though. What does the company who would be providing the student and payment say? Do they refer to it as a job, or do they refer to it as 'opening your home to a student' and being 'reimbursed' for costs? We often have students who are on a tour, but the money all goes to our school rugby tour fundraising or PTA fundraising instead of us parents taking the money.

sorryitsme

Generally it says you are allowing the student /guest to your home and you are given a fee to cover your electric, food, gas, etc wth extra amount ontop, it does not give a term for the extra amount.

It does not call it a job either.

Jowo_2

Don't conflate the benefits system with the tax system. See them as two separate systems. For example, just because there is a tax free scheme, it could well impact means tested benefits.

The rent a room scheme ensures that landlords with live-in lodgers do not have to pay tax on their rental income of up to £4250 per year.

See the information on the Landlordzone website and HMRC site for how this operates. Make sure you thoroughly screen your prospective lodger for suitability - I've a number of friends, plus there are plenty of posts on the Housing forum, that indicates novice landlords are sought out by rogue lodgers who know its easier to gain accommodation through charming keys out them, knowing that good letting agents and experienced landlords will identify they have a history of rent arrears, previous evictions, poor credit record, etc.

http://www.landlordzone.co.uk/tax/rent-a-room-scheme
http://www.landlordzone.co.uk/lodgers_rent-a-room.htm
http://www.landlordzone.co.uk/lodgers_questions_&_answers.htm
http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804
http://www.hmrc.gov.uk/individuals/tmarent-a-room-scheme.shtml

You now need to find out how your rental income (even tax free) can affect all your means tested benefits.

sorryitsme

Thank you for your advice so far.

The student will be from a Host family agency that provides them accomodation for their week exchange to visit tourist sights and learn english.

I would be entering into and "contract/arrangement" with the host family agency not the student.

If the students/minors or I am unhappy with their time in my property, alternative accomodation will be made straight away.

The maximum time the student/minor will stay is 2 weeks but can be as little as 2 nights.

I am not sure if being a host family means you are a landlord, hence I mentioned the rent a room scheme.

I will call the helpline to clarify what I need to do and what they need to know.