Rental income of £4,800 - tax free?

termhero

I have an ex-work colleague who rents out a yard he owns outright for £400 per calendar month. I have advised him that he would need to go through the HMRC process to decide if he has any tax to pay.

He believes that for £4,800 a year he wouldn't pay tax and doesn't need to let the HMRC know.


I disagree but it's only opinion, can anyone who knows please comment.


Other facts:


It's his sole income, his partner earns £32k and supports them both.


It is residential land (licence to dwell in a caravan).

Guest101

It would be tax free, as it's below the £10k personal allowance, but he needs to declare it to HMRC.

He might THINK its covered under rent a room scheme. but it's not. So even though no tax would be due, he really needs to do a self assessment.

And barring disability / child care - get a job!

silvercar

It creates an obligation to complete a self assessment tax form (either online or written) as the rental income exceeds £2500 per year.

https://www.gov.uk/renting-out-a-property/paying-tax

He may be right that he doesn't have tax to pay, but he still has to let them know.

Hmrc are currently running a campaign to offer previous non-declarers the opportunity to get their affairs in order:

https://www.gov.uk/let-property-campaign

So now is an ideal time to set his affairs straight.

termhero

Guest101 wrote: »

It would be tax free, as it's below the £10k personal allowance, but he needs to declare it to HMRC.

He might THINK its covered under rent a room scheme. but it's not. So even though no tax would be due, he really needs to do a self assessment.

My thoughts exactly.

Guest101 wrote: »

And barring disability / child care - get a job!

What a great, judgemental world you live in.

Bluebirdman_of_Alcathays

As above, although personal allowance has gone up to £10,600.

Guest101

termhero wrote: »

My thoughts exactly.




What a great, judgemental world you live in.

Why is it judgmental?

Being self suffiecient, bringing in additional income, having qulifications and experience - all builds confidence.

There is also the possibility of relationship breakdown, at which point he would not be able to support himself.

£32k is not a huge salary, surely, having a joint income of £40-45 which is basically achieveable part time would help. Certainly upto the £10k tax free personal allowance?

And purely personal opinion - I would be bored not working, just sat at home. And i would feel quite low about myself if i was relying on another human being to support myself. - some people are happy with it, but it's my opinion.

Bart1

Guest101 wrote: »

Why is it judgmental?

Being self suffiecient, bringing in additional income, having qulifications and experience - all builds confidence.

There is also the possibility of relationship breakdown, at which point he would not be able to support himself.

£32k is not a huge salary, surely, having a joint income of £40-45 which is basically achieveable part time would help. Certainly upto the £10k tax free personal allowance?

And purely personal opinion - I would be bored not working, just sat at home. And i would feel quite low about myself if i was relying on another human being to support myself. - some people are happy with it, but it's my opinion.

Wow

Just wow

audigex

It's judgemental because literally the only things you know about this man are that he doesn't have a job, gains an income of £4,800 from letting his yard, and has a partner who earns £32k

1) How do you know about whether this person lacks confidence?
2) Their relationship is none of your concern
3) You have no idea if he has other assets
4) £32k is a very reasonable salary in many areas of the country. And remember it's really £36k, of which £14k is tax free... in the area I live, that kind of joint salary is sufficient to buy a nice 4 bedroom house in a decent part of town
5) Whether he's bored is also none of your concern

The first half of your post was good advice. The second was just an un-necessary judgement of the life of a person you know absolutely nothing about.

For all you know he's about to start picking up his pension in 18 months, owns eight houses which he lets out rent-free to reformed alcoholics, comfortable in the knowledge that if his 40-years-and-still-besotted marriage ever did break down that he could easily start renting several of them out and have £2,000 a month to live off, plus half his £600k house he shares with his partner who works one day a week as she eases off work towards retirement having been a high powered manager.

Unlikely, perhaps, but the fact remains that their affairs are their concern.

Leo2020

I don't work because it is not worth me working, I have two small children. My husband earns about 26k. We can live on that fine so I don't see why they can't live on 32k plus his rental income especially when there is only two of them. Anyway it doesn't really matter what his circumstances are, he maybe happy with the ways things are and if he is then leave him to it. If he's not happy then thats something he needs to change for himself, no one else.

But the main point is that he still needs to inform HMRC.

Guest101

audigex wrote: »

It's judgemental because literally the only things you know about this man are that he doesn't have a job, gains an income of £4,800 from letting his yard, and has a partner who earns £32k - And my point was about the not working. I am entitled to my opinion. Just like you yours when you say im judgmental.

1) How do you know about whether this person lacks confidence? - I dont, i simply said that this is a common effect of working. He might be very confident.
2) Their relationship is none of your concern - well i wasnt exactly 'concerned', it wont keep me up at night.
3) You have no idea if he has other assets - assets isnt income though. And i know the income is only £4800
4) £32k is a very reasonable salary in many areas of the country. And remember it's really £36k, of which £14k is tax free... in the area I live, that kind of joint salary is sufficient to buy a nice 4 bedroom house in a decent part of town - equally it could be £42,000 of which £20,000 is tax free. I didnt say it wasnt reasonable. just that it could easily be higher.
5) Whether he's bored is also none of your concern - again, not conerned as such, just expressing my opinion.

The first half of your post was good advice. The second was just an un-necessary judgement of the life of a person you know absolutely nothing about. Thank you, and similarly calling me judgmental based on 8 words, so you know less about me than i do about the person in question is equally judgmental - using your logic. I suspect that my slightly tongue in cheek comment (given this is an ex colleague, so certainly has worked in the past) has been taken out of context. Was more highlighting the fact that £400 is not a lot to live on should something happen.

For all you know he's about to start picking up his pension in 18 months, owns eight houses which he lets out rent-free to reformed alcoholics, comfortable in the knowledge that if his 40-years-and-still-besotted marriage ever did break down that he could easily start renting several of them out and have £2,000 a month to live off, plus half his £600k house he shares with his partner who works one day a week as she eases off work towards retirement having been a high powered manager. - very possible, though i'd suggest that someone who was due to retire, and had the assets you suggest, would be more aware of tax regulations.

Unlikely, perhaps, but the fact remains that their affairs are their concern.

Let's remember its a public forum and everyone is entitled to express their opinions. You dont have to agree with them. The beauty of this site (and this country) is that we are free to express ourselves.

audigex

I know you're judgemental based on the evidence in front of me: a judgemental post which instantly shows that you are being judgemental.

However you defend it, you still have nowhere near the amount of information required to tell someone they have to get a job.

Your own income could easily be higher, should I therefore suggest that you take out an evening and weekend job? It's none of our concern what their joint salary is, and money isn't everything. If they have enough they have enough.

The point is that this post was about "Should my friend declare x income to HMRC" - it had nothing to do with his employment or relationship. Defending it as "I can say what I like" is just silly: they asked a question, you started judging their life for no apparent reason.