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sourpuss2021

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calcotti

Guidance is here
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/236962/hbgm-bw2-assessment-of-income.pdf
W2.310 onwards

Usually income will be taken based on previous year trading figures (W2.330).

sourpuss2021

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calcotti

I don’t have an opinion on that. Basis is that income will be based on trading accounts (presumably therefore normal tax rules would be applied).

sourpuss2021

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calcotti

Have I no opinion - all I could do was provide the guidance so you could refer to it.

In principle however capital that is in a business account is not personal capital.

sourpuss2021

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Icequeen1

sourpuss2021 said:

Thanks, Calcotti.

Also, I've had potential tenants offering to pay 6 months rent upfront, together with a 5-week deposit.  This sum would be more than £6k but less than £16k.  It would be received by me personally because they'd be signing a tenancy with me.  

If that happened I was thinking I would just immediately pay 6 months rent on the head landlord/owner, reducing the amount I had in my bank account to below £6k.

But that might be a bad idea because if the subtenants need to terminate the agreement due to job loss or relationship breakup, I won't easily be able to refund their money.  (I suppose I would just not give them the possibility of a refund - no break clause in first six months). I also don't want to create an expectation from the head landlord that six-monthly payments could become a regular occurence, because the subtenants would revert to paying monthly from month seven.

I appreciate this is the benefits forum not a tax or property one.  But my question is - from the perspective of how a Housing Benefit olficer would view it, would it be a bad idea to have 6 months of rent (for this other property) sitting in my bank account as a lump sum, which I would then pay it on to the landlord on a monthly basis?  It would be cash at hand, that had to be paid out later as a necessary business expense.  My profit would remain the same, £241.66/m, but I'd be sitting on a pile. And  I do have a seperate bank account in which I could hold this advance rent.

Are you already self-employed? Is this extension similar to your existing self-employment. Before doing anything, i would consult an accountant/tax adviser to see whether this is trading income or property income. 

Also - in your profit figure - isn't there a cost to you from renting it in the first place?  Your figures only seem to account for your renovation costs plus the income from the sub-tenant. Will there be other expenses? e.g. safety checks or is that all covered by the main landlord?

sourpuss2021

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sourpuss2021

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