rent a room scheme and the single person council tax discount

katejo

I currently let a room to a working person and use the rent a room scheme because I have no other extra income and pay tax through PAYE. Rent a room allows me to take £4250 per tax year without completing a tax return.
My rent keeps within this but I don't benefit from the full amount of £4250 because I lose approx £300 due to loss of the single person council tax discount. This has always seemed unfair as a couple letting a spare room would get the full benefit of the £4250 (since they already pay the full council tax).

I know that I could avoid this by only letting to students but is there any other legal way round it.

I do wonder whether some people try to evade tax by charging their lodgers separately for gas/ electricity/ council tax etc.

HappyMJ

Rent the room to a monday to friday lodger who has a main home elsewhere. No council tax is due for them as they pay it on their main home only.

katejo

HappyMJ wrote: »

Rent the room to a monday to friday lodger who has a main home elsewhere. No council tax is due for them as they pay it on their main home only.

yes I am aware of that option.

tomjonesrules

HappyMJ wrote: »

Rent the room to a monday to friday lodger who has a main home elsewhere. No council tax is due for them as they pay it on their main home only.

In which case they would also lose 2/7ths of their income!

katejo

tomjonesrules wrote: »

In which case they would also lose 2/7ths of their income!

Not sure what you mean by this? Who would lose 2/7ths? It is correct that you only have to pay council tax on your main residence. There is nothing illegal about that.

hcb42

yes, but they couldnt charge a full week's rent so the OP would lose 2/7ths of income or whatever.

OP, there is nothing to say it should be equal as a married couple/single person, there is the allowance which homeowners can claim under the scheme, and there is the council tax which is due to be paid, that's it.

katejo

hcb42 wrote: »

yes, but they couldnt charge a full week's rent so the OP would lose 2/7ths of income or whatever.

OP, there is nothing to say it should be equal as a married couple/single person, there is the allowance which homeowners can claim under the scheme, and there is the council tax which is due to be paid, that's it.

If I let to a student or someone on a Mon to Fri basis, I could charge £350 a month and keep within the tax allowance with no problem.

If I let to a working person for the full week, I could charge perhaps £370 a month to partially cover my extra council tax but would exceed the rent a room allowance if the person stayed a whole tax year.

Why should the system discriminate against the single person again? Why is it assumed that this is normal? I am not asking to offset against things like extra cost of gas, electricity, decorating costs or mortgage interest. I simply want to get the full £4250 tax allowance.

InsideInsurance

How can it be discrimination when it brings you inline with everyone else?

katejo

InsideInsurance wrote: »

How can it be discrimination when it brings you inline with everyone else?

No it doesn't. A couple get the full benefit of the tax allowance and I get the £4250 minus the additional council tax so my income only increases by approx £3900. A couple pay 50% of council tax each and I pay 100%.

BoGoF

Well charge your tenant extra.

At the end of the day the income tax rules and council tax rules are completely different and you will just have to accept thats the way it is.

lincroft1710

A married couple already have to pay 100% CT from their income. So whereas you lose £300 from your rent a room income, they've already lost it before they get their rent a room income.