Allowable expenses for housing benefits - lodger income

sourpuss2021

HillStreetBlues said:

With your landlord  is the payments broken down?  to you pay them for the flats you sublet and the rest of the house you live in  or do you just pay them one lump sum to cover everything?

I pay him in three separate transactions as there are three agreements.   I have an AST for the flat I live in.  And the other flats I believe are statutory common-law tenancies. 

I do often think I should just make one transfer each month of the whole amount.  

Because as it is, he’s likely reminded each month that he’s getting a lot more for the most recently sublet flat than he is for the other, or for mine.  And would be easier for him to just need to note one transaction.

I don’t think making one transfer would have an impact on my benefit eligibility but if I started doing that then it might be difficult to explain the breakdown if I ever applied for Universal Credit.  Especially as the rent I pay life my flat now is a lot higher than shown on my original AST.

sourpuss2021

HillStreetBlues said:

sourpuss2021

Looking more into the rules I think the site you linked to is accurate on how a HMO is classed.

So I would say stick to one lodger

Thanks, I will.  It’s a pity as there’s a lot better atmosphere with two lodgers than one.  It’s good (for them and for me) not being restricted to talking to just one person in the flat.  Also solo lodgers I find are either more likely to be the types to always hide in their room, or worse to try to dominate.  

Looks like I couldn’t keep the single empty and rent the large room to a couple, either, without it becoming an HMO  Nice article here:

https://pdpla.com/news/couple-renting-1-lodger-hmo?format=amp

sourpuss2021

sevenhills said:

sourpuss2021 said:

Thanks for mentioning the Rent a Room scheme.  I am already over the £7.5k limit with one lodger.   So even if I were allowed a second lodger I’d have to factor tax in.   Though I’m far below the tax free threshold on my overall earnings, it would become an issue when I’m back in full time work.

You seem to be an honest and resourceful person, I am sure you can earn more given the correct circumstances.

Thanks for your kind words!   One advantage of switching over to Universal Credit is I would get a work coach which might help me move forwards.  Once I’ve done the repairs/upgrades here I should really look into it.

HillStreetBlues

sourpuss2021 said:

Thanks for your kind words!   One advantage of switching over to Universal Credit is I would get a work coach which might help me move forwards.  Once I’ve done the repairs/upgrades here I should really look into it.

Also with UC the money you get from the lodger wouldn't count as income, you would just get the one bedroom LHA rate included in the housing element.

sourpuss2021

HillStreetBlues said:

sourpuss2021 said:

Thanks for your kind words!   One advantage of switching over to Universal Credit is I would get a work coach which might help me move forwards.  Once I’ve done the repairs/upgrades here I should really look into it.

Also with UC the money you get from the lodger wouldn't count as income, you would just get the one bedroom LHA rate included in the housing element.

True, and my rent is so low at the moment that it’s £50 below the 1-bed LHA rate.   

Yet the landlord charges me £300 above the 1-bed LHA rate (and £100 above the 2-bed rate) for the second sublet flat, which is actually smaller than mine.

So I’d definitely be vulnerable to future rent rises.  And me only being allowed one lodger does weaken the case for my voluntarily switching over to UC.

sourpuss2021

Another thing is that on HB once they have accepted your self employment figures you don’t have to submit anything till the next yearly review. 

Whereas with UC, I understand you need to let them know your figures every single month, and make sure income and expenses all fall within this same assessment period. 

Bringing this back to the questions I asked in my first post, my understanding is that if I do spend £3k revamping the bathroom in the sublet flat, then on Housing Benefit I can count this against my sublet income received over the following 12 months.

Whereas on UC, I could only claim it against one single month’s income for this sublet (about £200!).  So it would make a lot less sense.

Pity that the owner won’t just pay it himself as I bet he is a higher rate tax payer and so would effectively just be reducing his tax bill, therefore £3k would only “cost” him £1.5k!  But I can’t argue the point with him any more.

sourpuss2021

I think I will give the local council a call for clarification.  Because their website says three unrelated sharers constitutes a HMO.   And that a live-in landlord plus three or more lodgers would also be an HMO.

It says nothing about there being a rule that only the property owner, not a tenant, can be a resident landlord of two lodgers. 

It may be that they don’t mind a tenant having two lodgers, even though under a strict interpretation this setup may place the owner/head landlord in breach.

If they do say it’s okay I’ll be sure to get it in writing!