rent a room scheme and the single person council tax discount

CLAPTON

sadly just another reason that these anomalies shoudl be scrapped

there is absolutely not logic in giving a single person 25% discount on council tax
and there is no reason why extra income in the rent a room scheme should not be taxed in the normal way

scrap them both asap

agrinnall

CLAPTON wrote: »

there is absolutely not logic in giving a single person 25% discount on council tax

Do you not think that a single person is likely to consume less council services than a couple, or a household containing parents and adult children, or a house full of students?

I'd agree that the current CT situation contains many anomolies, but simply scrapping this one isn't the answer, a proper revamping of the system is required so that either there's a better relationship between what people pay and what they use (for instance, by going back to Maggie's original poll tax plan, but doing it right this time) or by charging according to what people can afford, such as through local income tax.

CLAPTON

agrinnall wrote: »

Do you not think that a single person is likely to consume less council services than a couple, or a household containing parents and adult children, or a house full of students?

I'd agree that the current CT situation contains many anomolies, but simply scrapping this one isn't the answer, a proper revamping of the system is required so that either there's a better relationship between what people pay and what they use (for instance, by going back to Maggie's original poll tax plan, but doing it right this time) or by charging according to what people can afford, such as through local income tax.

My point is that discounts and special deals like 25% off or the rent a room scheme are all introduced with 'good' intentions to help in specific way. (well some may say a vote winners)
However, they then lead to unfairnesses etc which leads me to say scrap them (or better not to introduce them in the first place.)

I understand what you say about the relationship between one's usage and what one pays but personally I think the there needs to be a 'progressive ' element in this taxation.
So while not supporting a poll tax approach I do support a fundamental change to local taxation including elements of land value taxes, sharing the spoils fo planning changes, local income tax etc.

However, given the fallout over the poll tax I doubt anyone will seriously propose any major changes.

InsertWittyName

If it makes you feel any better, my old property is empty and has been for quite some time. I pay 100% Council Tax on this property! If I had one person living there it would cost less...

Just how much Council resource does an empty property take?!

Pinkteddy

katejo wrote: »

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.

Hi, completing a tax return isn't difficult. It can be done online, most of the form won't apply to you, so you will only be completing a few paragraphs and it's mostly tick boxes. You can go onto the HMRC website and have a look at this year's tax return form, without having to send one in.

You could also charge your lodger more money. The additional tax you would pay on anything over £4,250 would still leave you extra money to pay the council bill. It depends how good a lodger you have - whether you want to risk losing them.

As to losing 2 days' rent out of 7 - well, this is up to you. If you make it clear that you are renting out your room on a weekly basis, then whatever price you set is for the whole week. You just need to make that clear. (You don't say whether you have a written tenancy agreement between you and your lodger, and perhaps you shouldn't go into that in this forum.)

Why don't you go onto the HMRC site and download the tax return form to have a look at, and decide from there? You can always ring them and say you're considering raising your rent, and ask what additional tax you would be paying if you charged various different amounts. They'll work it out for you.
Regards
Pinkteddy:)

katejo

BoGoF wrote: »

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.

You are missing the point entirely. I do charge my lodger extra to cover council tax but, if he stays a whole tax year, my income then exceeds the allowed £4250 so I am then supposed to pay tax on the excess. I absorb the extra cost of fuel/repairs etc. as it is impossible to work out what is reasonable to claim but the council tax supplement is a fixed amount.

katejo

Pinkteddy wrote: »

Hi, completing a tax return isn't difficult. It can be done online, most of the form won't apply to you, so you will only be completing a few paragraphs and it's mostly tick boxes. You can go onto the HMRC website and have a look at this year's tax return form, without having to send one in.

You could also charge your lodger more money. The additional tax you would pay on anything over £4,250 would still leave you extra money to pay the council bill. It depends how good a lodger you have - whether you want to risk losing them.

As to losing 2 days' rent out of 7 - well, this is up to you. If you make it clear that you are renting out your room on a weekly basis, then whatever price you set is for the whole week. You just need to make that clear. (You don't say whether you have a written tenancy agreement between you and your lodger, and perhaps you shouldn't go into that in this forum.)

Why don't you go onto the HMRC site and download the tax return form to have a look at, and decide from there? You can always ring them and say you're considering raising your rent, and ask what additional tax you would be paying if you charged various different amounts. They'll work it out for you.
Regards
Pinkteddy:)

As i understand, they would not be able to give me a figure because they would not have access to how much I had spent on heating, maintenance , mortgage interest etc.

If I let the room on a mon-Fri basis, I would not have this problem anyway because the lodger would be paying council tax on their main home. I would not lose my council tax discount.

I am not going to increase rent for my current lodger as he is reliable and has already stayed over a year.

katejo

InsertWittyName wrote: »

If it makes you feel any better, my old property is empty and has been for quite some time. I pay 100% Council Tax on this property! If I had one person living there it would cost less...

Just how much Council resource does an empty property take?!

Well let it out to someone then and you won't have that problem. The tenant will pay the council tax. The full rate of council tax on a 2nd property is surely to discourage people from owning 2nd properties and leaving them empty when so many people have nowhere to live.

katejo

lincroft1710 wrote: »

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.

Yes but the cost is split between 2 people. They also share the cost of food, fuel etc.

le_loup

katejo wrote: »

They also share the cost of food, fuel etc.

...... erm, one of them will be hungry then!