ESA and rental income

Cariad71

Hello,
I’ve searched the forum but the advice seems conflicted.
I want to know if rental income affects contribution based ESA.
Nowhere on the application does it ask about other income (other than pensions).

It does however ask if you are self employed. From what I can see, owning one house and getting income does not mean you are running a business and therefor not self employed or paying NI. See link below.


https://www.landlordsguild.com/hmrc-reminds-landlords-they-may-have-to-pay-ni/

Have I got this right? Obviously I have a landlord’s licence and declare my income for HMRC purposes. I’m just wondering if I need to make DWP aware. Thanks in advance.

sportsarb

Is it just one property that you are renting out?

If so it wouldn't make sense for it to be treated as a business. If you have a 150, have a business premises and have to be available multiple hours of the day then I would say its more in line with being self employed.

If it is just one, it has no effect on ESA(C), it is fully disregarded.

Cariad71

Thanks for taking the time to reply. Yes, it’s just one house. That’s what I thought but a previous thread said renting a house was considered self employment. Thanks for your help👍.

Afraid_of_Kittens

For contributions based ESA rental income is disregarded as income. They only need to know that you are genuinely unemployed and are looking for gainful employment and dont have any incoe from paid employment or self employment. For Income Based ESA then yes they will need to know about rental income as it will be treated as income.

sportsarb

Afraid_of_Kittens wrote: »

For contributions based ESA rental income is disregarded as income. They only need to know that you are genuinely unemployed and are looking for gainful employment and dont have any incoe from paid employment or self employment. For Income Based ESA then yes they will need to know about rental income as it will be treated as income.

The bit in bold doesn't apply for ESA, if in the WRAG there will be some work related activity, but you don't need to be looking for employment.

calcotti

Afraid_of_Kittens wrote: »

For contributions based ESA rental income is disregarded as income. They only need to know that you are genuinely unemployed and are looking for gainful employment and dont have any incoe from paid employment or self employment. For Income Based ESA then yes they will need to know about rental income as it will be treated as income.

For contribution based ESA this bit doesn't apply either, earnings below £131.50 can be ignored if permitted work.

Cariad71

Thanks everyone.

Cariad71

Hi Kirsty, sorry to hear that you’ve been diagnosed with M S. Have they checked your b12.... sometimes this deficiency is misdiagnosed as MS. 

You can definitely own a property and rent it out with contribution ESA. Good luck with your claim 

Cariad71

https://www.gov.uk/hmrc-internal-manuals/national-insurance-manual/nim23800

See above. It would only be a business if you had multiple properties or were offering multiple services. This is from gov website. Also, nowhere on the ESA form to they ask about other income (apart from pension). Relax 

JessicaF_2

Kiki7976 said:

Thanks for getting back so quickly. 
I've had MS for many years now sadly. It sucks 😕.
I have been so paranoid about renting this flat out truthfully and now I'm in the dreaded tax situation. I have worried so much about doing it at all in the first place. My husband works but I'm on CB ESA (with a private pension, I declared). Am I  definitely ok to be doing this? We hardly make anything in profit, being honest. It basically pays the mortgage. Im so worried. Please forgive me.

You are ok as far as CBESA goes, but you do need to ensure you declare it appropriately to HMRC for tax purposes. You won't be self-employed and don't need to register as such, but you may need to complete a self-assessment return. There have been some considerable tax changes for residential landlords, so it all depends on the figures involved. 

See: https://www.gov.uk/guidance/income-tax-when-you-rent-out-a-property-working-out-your-rental-income 

I know you say you don't make a profit - but that may not be the case for tax purposes as not everything you pay out will necessarily be an allowable deduction against the rental income. 

Jess

whizzywoo

Kiki7976 said:

Thanks. I'm already in receipt of CB ESA. I just never really checked out if I was allowed to rent it out. We just done it lol. Thanks for your advise. 

Don't forget that CB ESA is taxable income and will need to be entered on your SA tax return.