Lodger Working from home

Jeexy

Hi

I have just taken on two lodgers in my home, and have found out that one of them mostly works from home and only goes into the office occasionally, the company they work for is based elsewhere in the country, so is this classed as them running a business from home? and how does this affect me?

Thank You.

Stevie_Palimo

http://www.hmrc.gov.uk/manuals/pimmanual/pim4001.htm

Pixie5740

Unless your lodger is having clients turning up at your home I'm pretty sure this is just working from home rather than running a business from home.

As an aside do you realise that by having 2 lodger you might have Capital Gains Tax to pay if/when you come to sell your home?

fashionvictim

I work from home and very occasionally go out to meetings but I am employed. Did they tell you they tell were employed? Working from home is getting more common !

Do you mind them being around all day?

tiger_eyes

You may need to think about whether someone using your home for business purposes is permitted by the mortgage terms; if it affects your insurance; and whether the local council will permit business use. I run a business from home, but since everything is done on my laptop, with no phone calls, no visitors, etc, I've never had a problem getting permission.

fashionvictim

tiger_eyes wrote: »

You may need to think about whether someone using your home for business purposes is permitted by the mortgage terms;

People who work from home aren't all running their own businesses. If your lodger is self-employed that is different, but the OP said they are employed.

teddysmum

Should he, perhaps ,pay a little extra rent as he will be using extra power for daytime heating (especially in winter), a computer and lighting (when daylight hours are shorter) ?

marksoton

I'd imagine this would only get messy if your lodger is claiming back business expenses ( Electric etc) on your property.

Might be worth checking he isn't and has no intention of doing so.

G_M

* Check your insurance. Though I assume you have already checked they are OK with you having lodgers.....
* I doubt here is a mortgage issue

As advised above, as well as income tax (see links below) Capital Gains Tax may be an issue.

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 provides definitions of 'Resident Landlord' and 'same property' (S31 & Schedule 1 (10).

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (21 tips from solicitor Tessa Shepperson + General information site)

Landlordzone (Various articles on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)

moneyistooshorttomention

marksoton wrote: »

I'd imagine this would only get messy if your lodger is claiming back business expenses ( Electric etc) on your property.

Might be worth checking he isn't and has no intention of doing so.

Which, of course, might mean CGT might become a problem.

I have had lodgers before now - ie for some time back in my last house and occasionally it was 2 of them at that. As I intended (from Day 1) to sell that house and "move up ladder" when I could, I was always aware about CGT risk.

I'm trying to recall the reason I was "off the hook" on that. I think it was either that earnings were beneath the limit allowed or so many years had passed in between stopping taking lodgers and my selling the house on. I cant recall which of those was the reason I didn't have to pay it now - so worth checking both of those possibilities. I suspect it was the first option that applied...