ESA and rental income

calcotti

Kiki7976 said:

Sure. I'm really confused about all this, being honest. I was just so scared that I was not allowed to rent that flat out at all being on CB ESA. Am I definitely ok to do that? Ive tried to call and check with ESA themselves but they are closed.

Your question has been answered several times already.
Income is ignored for CB ESA (except for pensions and some insurance payments)
Renting out one property will not be treated as a business and the income is not therefore earnings which might breach the permitted work rules.

it sounds as if you will not have peace of mind until you have spoken to DWP in which case you will just have to keep trying to get through.

calcotti

Kiki7976 said:

Appologies but if had this reply before and it's just confusing.


Providing you are/have declared the income, this should be taken into consideration.

If you haven't declared it then you may have made a false claim in which case they will be looking for their money back.

Where are quoting this from? 

calcotti

Kiki7976 said:

Who knows? I posted the same query on a landlord page months ago. This was his reply. I think he's speaking of IR ESA though. 

Certainly those comments would apply to IRESA.

Cariad71

Try not to stress over it. You absolutely are allowed CB ESA and to rent. You obviously have to declare rental income. ESA doesn't need to be declared on your tax return because as you have declared your pension (as did I), you'll have been taxed at source.One other thing to consider is that legally you have to apply for a landlord's licence (that's easy enough.....a bit of a faff..but easy enough. Also get landlord's insurance.

calcotti

Cariad71 said:

Try not to stress over it. You absolutely are allowed CB ESA and to rent. You obviously have to declare rental income. ESA doesn't need to be declared on your tax return because as you have declared your pension (as did I), you'll have been taxed at source.One other thing to consider is that legally you have to apply for a landlord's licence (that's easy enough.....a bit of a faff..but easy enough. Also get landlord's insurance.

That’s not correct. CB ESA is taxable income and if a tax return is completed would need to be declared on it.

whizzywoo

Cariad71 said:

Try not to stress over it. You absolutely are allowed CB ESA and to rent. You obviously have to declare rental income. ESA doesn't need to be declared on your tax return because as you have declared your pension (as did I), you'll have been taxed at source.One other thing to consider is that legally you have to apply for a landlord's licence (that's easy enough.....a bit of a faff..but easy enough. Also get landlord's insurance.

ALL taxable income, including Contributions Based ESA has to be entered on a self assessment tax return. It does not matter whether or not it has been taxed at source or not.

There is a specific place on the tax return where taxable benefits are entered and the Opening Poster should receive a P60 from the DWP saying how much taxable income has been received and if any tax has been deducted. 

Unless the pension income is very high it is unlikely that any tax will be due on the ESA but it still needs to be entered so that a there is a total of all taxable income including taxable benefits, pension, rental income and any other taxable income.

whizzywoo

Cariad71 said:

My pension was taxed because I was in receipt of ESA. so I was already taxed on it. OP has declared her pension so will have already paid tax on it.

ALL taxable income is entered on a tax return. It doesn't matter whether or not tax has been deducted from it.
The idea of a self assessment tax return is to add up all the taxable income and any tax paid and then see if the correct tax has been paid after making adjustments for the personal allowances etc. Sometimes too much has been paid and sometimes not enough.

Dazed_and_C0nfused

whizzywoo said:

Cariad71 said:

My pension was taxed because I was in receipt of ESA. so I was already taxed on it. OP has declared her pension so will have already paid tax on it.

ALL taxable income is entered on a tax return. It doesn't matter whether or not tax has been deducted from it.
The idea of a self assessment tax return is to add up all the taxable income and any tax paid and then see if the correct tax has been paid after making adjustments for the personal allowances etc. Sometimes too much has been paid and sometimes not enough.

And although the op does not consider that they are making any "profit" from renting the property out now that finance costs such as interest on a mortgage is no longer claimable as an expense they may well make a profit for tax purposes.

Although there can be a tax credit available in respect of the finance costs which can mitigate tax payable on the rental income (if there is any tax to pay).

calcotti

Kiki7976 said:

Do I need to pay tax on receiving CB ESA? 

Only if your total taxable income is above your tax free allowance of £12,500/annum.

Dazed_and_C0nfused

Kiki7976 said:

The HMRC said I've to list all benifits I recieve. That's PIP, Child Tax Credit, CB ESA and DLA. And my private pension (which I have already declared). I'm just going to send them in  

List them on what?

You only declare taxable income on your Self Assessment return.

PIP, Child Tax Credit and DLA (disability living allowance?) aren't taxable.

If you include those things on your return you will make them taxable unnecessarily.