im currently renting my back bedroom out to my lodger. hes currently paying £220 a month which inc bills and council tax, plus he has his own bathroom and sky box with all channels in his room. thinking of increasing the rent as i dont think im really charging him enough. what do you think??
rent advice
- Thread starter psalliss
- Start date
Soldato
I assume you are declaring this income to the tax man? if not you could find yourself in very hot water.
He will at some point put his address down on something or other and the computers will start talking to each other and sooner or later the inland revenue WILL some knocking to enquire why you haven't paid any tax on this income. If he appiles for credit, or anything that requires a check be carried out, the inland revenue will get a whiff of it.
Just a head up in case you havnt done anything about declaring it.
As for the rent id just go round a few agencies and see what they charge.
He will at some point put his address down on something or other and the computers will start talking to each other and sooner or later the inland revenue WILL some knocking to enquire why you haven't paid any tax on this income. If he appiles for credit, or anything that requires a check be carried out, the inland revenue will get a whiff of it.
Just a head up in case you havnt done anything about declaring it.
As for the rent id just go round a few agencies and see what they charge.
You could probably justify increasing the rent given what hes got.
If it were student accomodation owened by the University i.e. halls then you could probably expect to pay £80 per week. In some places more! For that you would expect En-suite, Internet Access and your Bills. So a comparable example.
It might be worth doing a bit of research by looking at other similar lets in your area. (See local papers?).
Also, think about what your logder does for a living- could he afford the rent increase? Do you want to loose him?
Justin
If it were student accomodation owened by the University i.e. halls then you could probably expect to pay £80 per week. In some places more! For that you would expect En-suite, Internet Access and your Bills. So a comparable example.
It might be worth doing a bit of research by looking at other similar lets in your area. (See local papers?).
Also, think about what your logder does for a living- could he afford the rent increase? Do you want to loose him?
Justin
Soldato
geeza said:
lol.... obviously you have never had dealing with Her Majesties finest. No that would be found out in an instant. Im just saying that IF they find out you will be liable to pay tax immediately on any and all income not declared. If for example over a course of 10 years you had taken £250x12x10=30,000 you would be given a bill for whatever tax was due from that amount. To be paid immediately.
Its best not to leave it to chance at any rate.
Caporegime
pyro said:
Don't think how much he earns should ever comes into the equation when it comes to residental leases. Is he going to let him stay for free if he's on the dole?
cheers was thinking 220 was a bit cheap. he earns enough to pay the extra money, so that isnt a major problem. plus his gf virtually lives her and his tv is on all night long.
didnt think i would have to declare it as tax, probably being naive.
didnt think i would have to declare it as tax, probably being naive.
Soldato
psalliss said:
deffo up it. I pay £55 for a room a week which is JUST the room no bills etc or no free sky, thats awesome deal he has.
Soldato
psalliss said:
Its your god son
Soldato
psalliss said:
You just have to declare it as income. You have a job i assume so any tax due is taken through PAYE ( pay as you earn ). This income is not taxed through that system so you are commiting an offense by not filling out a return at the end of the financial year and declaring it. In the same way a self employed person does. ANY income not taxed through PAYE or other means has to be declared and the tax office then decide if you owe anything.
Sorry im really not trying to be an ass im just making you aware of the situation... if u are unsure just phone the local tax office and talk to them. They arent evil and they wont bite ( without provocation hehe)
The amount you pay wont be huge anyway ( and just put his rent up to cover it like all other landlords do) but if you get found out and appear to be acting fraudulently then they can make your life hell. Ignorance of course is no excuse to them.
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as for the Inland rev boys..... i aint no accountant but ....
done forget that individuals are allowed upto a certain amount per year tax free as a "gift".... also, for rent that low, you can argue that a lot of it actually went into the actual upkeep and payment of the sky, electricity etc. Hence the actual amnount of profit would be too low for the inland revenue to get bothered about.
done forget that individuals are allowed upto a certain amount per year tax free as a "gift".... also, for rent that low, you can argue that a lot of it actually went into the actual upkeep and payment of the sky, electricity etc. Hence the actual amnount of profit would be too low for the inland revenue to get bothered about.
Soldato
frosty03 said:
True but you still have to fill in a tax return. TBH the likely tax due will be small but they take tax evasion very seriously ( certainly round where i live ) and its best to just avoid it all and be upfront.
psalliss, don't get too edgy about Income Tax on this income, because from what you've said, it's VERY likely you won't pay any.
The Revenue operate a scheme called the Rent-A-Room scheme, designed specifically for people letting a room in their house, rather than professional landlords, and providing you meet basic criteria, the first £4250 of such rental income, per year, is tax free.
Get yourself over to the Revenue website, check out this scheme, make sure you qualify and make sure you notify the Revenue of anything they need to be told .... but don't worry to much about this getting taxed. It shouldn't.
The Revenue operate a scheme called the Rent-A-Room scheme, designed specifically for people letting a room in their house, rather than professional landlords, and providing you meet basic criteria, the first £4250 of such rental income, per year, is tax free.
Get yourself over to the Revenue website, check out this scheme, make sure you qualify and make sure you notify the Revenue of anything they need to be told .... but don't worry to much about this getting taxed. It shouldn't.
Soldato
Yeah its very unlikely there will be anything to pay. The important things is to let them know so they cant try and blast you with an unexpected letter one day.
Soldato
AtreuS said:
Er wrong, there is a scheme whereby if you occupy the house and have a lodger you do not have to declare it. My accountant didn't believe me either until I found the paperwork... http://www.hmrc.gov.uk/manuals/CG4manual/CG64703.htm
http://www.hmrc.gov.uk/manuals/CG4manual/CG64703.htm
That's Capital Gains Tax relief, not Income Tax. One of the main exemptions from CGT is your 'principal private residence', but you can lose that exemption if part of your home is used exclusively for business.... such as a lodger. That document outlines the distinction between letting a room in your home (and not losing the CGT relief) and running a lodging house (where you would have the relief limited).mattpc said: