Benefit and tax status as an AIRBNB host

Cavalli

For many many years I was a full time carer for my late mother. She passed away in April and I continue to own the family home - no mortgage or rent. All benefits ceased within 8 weeks of my mother's death. I've made no attempt to claim any. Given a moderate amount of savings I decided I could survive in the short term without registering as unemployed while I considered how to find a source of income. The spare rooms in the house would be my fall back. Well I thought I'd give Airbnb a try and in the last 5 or 6 weeks have had bookings every week for the one spare room I'm renting out. These are generally short 1 or 2 night stays, largely at weekends. In other words its not constant or in that sense reliable..I don't know how much my repeated bookings have been sheer luck or seasonal for example. But averaging it out over the period it amounts to I guess £80-100 per week coming in. Not much but pays the essential bills. I could over time free up other rooms or put the price up, but for now that's my situation and income.

The question is where do I stand - if at all - in terms of low income "in work" benefits and for that matter tax. Am I self employed? Is this a business? I understand that I'm way below the threshold for paying tax, and that renting out a room even on Airbnb allows you earn £7500 is it? tax free in any case. But nonetheless am I meant to register with someone? I've never had to fill in a tax form before and as for benefits I don't even know the answer to the question "how many hours a week do you work?"! How do I even calculate what part of being present in my own home is "work"?

I've tried looking these things up but not found a clear answer, certainly in terms of benefits, as it seems to me an odd middle ground between employment and unemployment.

Guest101

I don't believe that AirBnB is covered by the rent a room scheme following recent rullings?

Cavalli

Guest101 wrote: »

I don't believe that AirBnB is covered by the rent a room scheme following recent rullings?

That's not entirely clear..the only searchable results suggesting a change were in newspapers prior to the budget suggesting what MAY happen. I can find no report of such a change going through .

The government's own online documents on teh subject for 2017 state:

You can use the scheme if:

• you let a furnished room to a lodger
• your letting activity amounts to a trade, for example, if you run a guest house or bed and breakfast business, or provide services, such as meals and cleaning
  
  Whether Airbnb is included in that latter category or, not being a registered "business" on my part, falls outside of it I don't know. At any rate its mostly academic given the amounts involved in my case. The government info furhter states that if its under the threshold of £7500 you don't need to do anything.

pmlindyloo

Airbnb is covered by the rent aq room scheme at the moment. Consultations about this are beginning but,as far as I know, it is only at the consultation stage. I am sure Martin Lewis would have updated the article there was any recent news.

http://www.moneysavingexpert.com/family/airbnb-hosting

As you say, you are under the threshold any way.

As regards claiming benefits, which ones are you specifically needing help with? Are you single? Any children? Any disabilities? Any savings?

Cavalli

pmlindyloo wrote: »

As regards claiming benefits, which ones are you specifically needing help with? Are you single? Any children? Any disabilities? Any savings?

Well its a case of simply enquiring whether I'm entitled to claim anything at all. Essentially I feel like I'm completely off the radar and ought to be in some interaction with the state. Continuing national insurance payments for example. It occurred to me when I realised I needed to book a dental appointment..somethng I'm used to not paying for as I'd been on income support as a carer...and realising from this point on all those things which come with being on low income will have ceased for me should I need them..even though I am in fact still on low income, in fact less than I was as a carer!

So its less an immediate need as a what exactly is my status? I've found - via the hosting - a source of basic income but have no employer, I'm not running a business in any concrete sense - or if I am am not sure who I'm meant to tell - and if I were in either of those situations would, I assume, be entitled to some "in work benefit" on the basis of having low income. Does any of that apply to me in my circumstances? As I say the immediate issue is I feel like ive fallen between the cracks in the system and this may have unforseen repercussions in the future...do I surive as is and turn up in 20 years demanding my state pension (I'm 2 years shy of full entitlement, I've checked). They'd surely need to know where I've been.

Guest101

Cavalli wrote: »

Well its a case of simply enquiring whether I'm entitled to claim anything at all. Essentially I feel like I'm completely off the radar and ought to be in some interaction with the state. Continuing national insurance payments for example. It occurred to me when I realised I needed to book a dental appointment..somethng I'm used to not paying for as I'd been on income support as a carer...and realising from this point on all those things which come with being on low income will have ceased for me should I need them..even though I am in fact still on low income, in fact less than I was as a carer!

So its less an immediate need as a what exactly is my status? I've found - via the hosting - a source of basic income but have no employer, I'm not running a business in any concrete sense - or if I am am not sure who I'm meant to tell - and if I were in either of those situations would, I assume, be entitled to some "in work benefit" on the basis of having low income. Does any of that apply to me in my circumstances? As I say the immediate issue is I feel like ive fallen between the cracks in the system and this may have unforseen repercussions in the future...do I surive as is and turn up in 20 years demanding my state pension (I'm 2 years shy of full entitlement, I've checked). They'd surely need to know where I've been.

I suspect any benefit would be contingent on seeking employment. But someone more qualified will answer no doubt

xylophone

Should you not consider claiming JSA and looking for work, perhaps part time initially?

Darksparkle

The benefit for working (on a low income amongst other conditions) is working tax credits. Money paid through the rent a room scheme is not considered to be paid work for tax credit purposes.

If you are planning to job seek then you could potentially claim JSA.

Cavalli

xylophone wrote: »

Should you not consider claiming JSA and looking for work, perhaps part time initially?

Well indeed but in a sense doing the airbnb was my way of avoiding having to claim job seekers allowance. The money I have coming in now is basically equivalent to what I might get by registering as a job seeker..and presumably the fact I have it coming in would disqualify me from receiving it or a least a portion of it! It struck me that if I could get the same income independently and without the pressure of being obliged to report how many jobs I've applied for today (I was a carer for decades and am well into middle age..I didn't rate my prospects of finding regular work any time soon) then it was preferable for all parties.

As I say my circumstance is not one of immediate desperate need of financial assistance but rather confusion as to my status and relationship with the treasury - no benefits are coming in and no taxes are going out. This can't be a unique situation but off the top of my head children and crooks are the only obvious other categories it applies to! haha

pmlindyloo

So, presuming you are single you could claim JSA or Universal Credit - the latter depending on which service is operating in your area.

Both would involve your making a claimant commitment as regards finding work.

For Universal Credit purposes any income from a boarder/lodger would be ignored.

For JSA, boarders' income will see a £20 disregard of the income plus a deduction of 50% of any excess over the £20.

See:

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/626753/dmgch28.pdf

28182

Boarder means you need to provide a meal (breakfast for example)

So it is worth claiming one of these if you are prepared to look for a job.

You should also apply for council tax reduction from your local scheme.

Do make sure that you are keeping records of the income that you are receiving as they ask for these,

If you do not wish to claim benefits (and of course it depends on your level of savings) then you can make voluntary NI contributions (google for more information)

Cavalli

Thanks for all that pmlindyloo, it answers my essential questions re benefits.