Rent a room clarification

edpvito

Hi I am going round in circles with HMRC

During 2014/2015 I rented a furnished room out in my house - that I live in which I gained £3380 gross income from. I declared this and they have lumped this in with my fairly meagre salary income and they say that I owe £509.80 tax on that figure of £3380. My understanding is that under a certain amount you are able to rent a room out exempt of tax irrespective of what you earn through employment. I have phoned the tax office numerous times and spoke to various different departments and we go through the same conversation: 'Here are the figures this is why we have come up with £509.80', 'yes I understand basic mathematics but can you clarify why am I paying tax on a rent a room scheme where all the documentation says that this is tax exempt up to a certain figure?'

Am I being stupid here? Its not massively unlikely that I have misunderstood something but I cant work out what...

Lokolo

Why did you declare it? You don't need to if it's under the threshold.

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

edpvito

I know i know. I said that to them on the phone and i even read passages out and the woman I spoke to said..

'you still have to declare it...'

I believe that 2014/2015 you still had to declare it? I have made the mistake of doing it for 2015/2016 and I now owe money for that as well..albeit £100.

[Deleted User]

This may seem really stupid but - did you tick the relevant box to claim rent a room relief?

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/501201/sa105-2016.pdf

edpvito

I did it online via government gateway. I dont remember seeing the option but I will login and check..

edpvito

I see no option when i try to amend last years tax return. I don't understand how the numerous people at HMRC are not able to understand this? Surely they know that the rent a room scheme exists and that this is tax exempt up to a certain figure? Its like no-one has ever heard of it.

[Deleted User]

edpvito wrote: »

I see no option when i try to amend last years tax return. I don't understand how the numerous people at HMRC are not able to understand this? Surely they know that the rent a room scheme exists and that this is tax exempt up to a certain figure? Its like no-one has ever heard of it.

May I suggest that you delete the income from property section and go back into 'tailor your return' The option may appear when you re-enter the figures but I confess to not being absolutely certain.

Darksparkle

You don't declare it if within the allowance. It tells you this on the gov site.

[Deleted User]

Darksparkle wrote: »

You don't declare it if within the allowance. It tells you this on the gov site.

We both are aware of that - the op seems to have a job convincing the HMRC staff to which he has spoken - hence my suggestion. I can't really think of an alternative other than a further attempt to speak to someone with the correct knowledge.

The relevant box does seem rather odd though. Why ask if you wish to claim rent a room relief when, as we agree, one does not need to declare it? Or is this simply for rents exceeding the allowable amount and claimed on the alternative basis?

Dazed_and_confused

I don't know what op is expecting HMRC to do when they phoned them, op refers to government gateway so I guess they've submitted a tax return which shows £3300 rental income and has had a bill based on this. The simple fact is if you declare income on a tax return HMRC will include it in your tax calculation/bill. HMRC are never going to change that just because op phones up and says it's wrong.

The problem seems to be op had put something on the return they shouldn't have so I dont know what op's hoping to achieve by discussing this with HMRC, surely the best course of action would be to simply send an amendment to the tax return making it crystal clear what op wants to change i.e. amend all entries on the income from property page of the return to 0 and add a tick to the box for declaring rents received but covered by rent a room relief. Same would need to be done for 2015:16 as it looks like op had also submitted return for that year as well.

To me op is wasting their time phoning up about this as the bill will be correct based on the information op has provided to HMRC. Op needs to alter the underlying data originally declared and the only way to do that is to amend the return.

Dazed_and_confused

edpvito

edpvito wrote: »

Hi I am going round in circles with HMRC

The reason you are going round in circles is that you're ignoring the basic fact that the bill is correct. HMRC tax you on what you tell them your income is. You have told them you have rental income of £3300 so they send you a calculation or bill based on that.

If you made a mistake in declaring the £3300 then you need to change your tax return, see my previous post