Rent a room scheme (but would it count as an HMO?)

rioja77

You seem to suggest I am being mean Teamocil, and if you do I think you are being at least a little unfair but you are entitled to your opinio, it just makes me feel the need to defend myself for some reason!
(I wouldn’t charge more than allowance as I don’t want to be making profit or have the hassle and potential expense of tax returns. I have said I would charge LESS than the tax allowance - somewhere else my friends would be paying £1200+ per month plus all bills circa £300 and be tied into a 6/12 month contract, with us they would be paying far less than half that and have total flexibility - House next door is an HMO at over £500 a room excl btw)

rioja77

Agree that I should check with council Smodlet and i will do so, thanks for your comments everyone.
i think even if I was thinking of them staying without paying anything for rent and bills I would need check this out officially as wouldn’t want to look like it could be under the radar or just dodgy for a house going from 2 to 6 people at a time/area where air bnbs and HMOs are rightly under the microscope

anselld

You will also become liable to Capital Gains Tax on the relevant portion of the property.

Smodlet

I never usually advocate the "under-the-radar" approach but really, why can you not just have your friends to stay without anything official in the mix? After all, no guest with any clue about etiquette would dream of failing to contribute to costs by buying food/groceries, offering to pay bills... There is no reason why you cannot still set clear ground rules from Day 1, is there?

Slithery

rioja77 wrote: »

...do the kids count as people?

Not in my house they don't

Honeylife

It all sounds wonderful on paper, but have you actually thought of the costs of having four additional persons in your house in terms of all utilities; water bill (more laundry & baths especially with children) electrics (more bits and bobs plugged in) gas (more heating and cooking), WiFi (needs to be faster and available) and wear and tear, not to mention the lack of privacy (are you sharing your lounge too?) especially as you are outnumbered by the other "household" and they have children with sticky fingers running along your walls doors etc.

I have some concerns as you don't say if you have had lodgers before and having any person even if it's your own family come to live in your home for some time can easily change the relationship dynamics.

Unless the house is a wreck already you will find the COSTs of suddenly having four extra bodies quite considerable, leaving you with not much profit to do up your place when they depart. That is if you keep the rent at £625pcm. I suggest you discuss these utility bills with your potential lodgers and ask for a separate contribution to one or two of them. I have an added clause in my Licence Agreement that states if the rate of Gas and Electric increases then an appropriate increase will be made to the rent. I got badly stung one year with Utility increases. When people don't own the house they are living in they don't care for it in the same way and you have to watch that dismissivness. Also they expect you, as the Landlord, to do everything including changing the light bulb immediately! Are you really ready for this with four persons? One is hard enough!

I suggest that double the amount is far more realistic charge to cover your potential costs and the Tax Return can be done v easily and there is a lot of help from HMRC online. But I really cant see how you can make much of a profit here to allay for the forthcoming headaches.

Comms69

Teamocil wrote: »

Your decision on how much to charge your friends is determined by how much the government allows you to without paying tax? Lovely.

and? Whats the issue?

Soundgirlrocks

anselld wrote: »

You will also become liable to Capital Gains Tax on the relevant portion of the property.

Whilst technically correct, 7/8 months v 10+ years owner occupier, factoring in all the reliefs etc its not going to come into play. Its scaremongering.


OP if you are interested here is a thread with some of the maths, but in your case I wouldn't worry about it.