Rent-a-room tax question

You can go over the allowance (some £4250 per year), but you just pay tax on the extra. You can't claim expenses however.

Or you can pay tax on the full amount of rent, but you can then subtract expenses. Try and obtain the rent-a-room leaflet from the inland revenue.

One thing to watch for, I think the scheme assumes you are only renting a single room, which doesn't exceed one third of the house, or some such rule.

I never paid close attention to this. You can always charge a huge amount for one room, and have the other two rent-free..

Otherwise I guess you are outside the scheme, and pay tax as normal on this extra income. But you might possibly incur capital gains tax when you sell the house.

One of the ideas of the scheme is that you don't need to tell them about rents below the threshold. Above that, you might need to fill in extra Land & Property tax return pages (on self-assessment anyway).

And with 3/4 of your house rented, the local council may consider your house to be a HMO (house multiple occupation) with regulations to comply with.

Does HMO apply to B&B? I heard that with 3 rented rooms or less you don't need to register it as a business with the council.

The entire HMO business is quite confusing. You might want to start here:

In my case (resident landlord with most rooms rented), a guy knocked on my door, asked some questions, and said I had a HMO and the council would be in touch. But I heard nothing more. However my property already had the fire doors and some of the other requirements which would become necessary. This was a few years back and since then licenses and whatever might now be needed.

There's nothing no-no about being paid in cash, unless by doing so you aren't going to pretend you received less than you actually did.

No, neither of the above. The rent-a-room allowance applies to *gross* rent received, *inclusive* of anything received as expenses.

No, but if it's above the limit you can choose whether to pay tax on the excess (i.e. the gross total actually received minus the allowance), or instead to ignore the allowance and to pay tax on the actual profit, i.e. the gross total received minus the expenses involved in provididng the accommodation, which would include (in the case of 3 lodgers plus yourself) a 3/4 share of all pooled bills. The pooled bills would typically include food, council tax and insurance, and any mortgage interest you're still paying.

HMO rules aren't about registering a business, they're about needing to apply for a licence, which will require upgrading the property to comply with more stringent (mostly fire) safety standards than in a normal dwelling.

B&B is a separate thing altogether, and may have its own independent set of rules which apply instead of HMO rules, but a B&B doesn't generally count as an HMO because people who stay there generally live elsewhere, i.e. B&Bs are holiday accommodation. HMO rules don't count guests, they only count residents.

The definition of an HMO (in Scotland, elsewhere YMMV) is a property which is occupied by people who are members of more than two families, but owners don't count. This means that an owner can have two lodgers without the place counting as an HMO, but no more than two unless they're related, so you could have four lodgers if, for example, they're two couples.

But an owner with family not all of whom are co-owners (a couple might co-own but their children would usually not) could only have one lodger (or one lodging family), not two, because the owners' children would count as part of one of the two permitted families (even if the owners themselves are excluded from the count).

Great idea. I'm going to ask my employer not to pay me a salary, instead they can BACS me a 'cash gift' on the last Friday of every month so I don't have to pay income tax.

Foolproof.

I thought it was funny when the idiot said that receiving cash was a no-no yet paying rent as gifts was ok!

Whilst I'd agree that those tactics wouldn't change the tax liability and, if discovered, might cause HMRC to do a full tax audit, it is interesting to note that US educational and scientific "charities" give suggested donations for their merchandise, presumably to retain their not for profit status!

You're in no position to call me an idiot, you POS bean counter.

Your job as an accountant caters to an artificial demand which wouldn't exist if it weren't for government's obsession with convoluted tax laws and frankly at the end of your life your job would not have done anything useful to contribute to humanity. I'd say even a checkout girl, gardener or mechanic caters to a real demand unlike you.

If you or your Polish (lol, explains a lot) wife can't do anything useful with your life other than parasitise off a tax bureaucracy then at least learn some manners before you clock out.

Yes he is, actually, because your suggestion was, objectively speaking, pretty daft. But despite being in the position to do so, he should have refrained from it. It was rude.

Oh dear, now who's being rude? He counts NEG beans too, you know.

Well, you did ask the question. You didn't add "please don't answer this if you're an accountant", so even in your view they must be of some use!

Steady on, pal. If you're going to hurl insults about like this, and about his wife to boot, you're hardly in a position to lecture anyone about manners.

Take a look at Peter Saxton's posting history. It drips condescension as though he thinks his position as an accountant has elevated him to deity and woe on us who are ignorant about the wonders of tax calisthenics.

As I have said, the fact of the matter is that accountants cater to artificial needs which solely exist because of convoluted tax laws. Otherwise, he would be out of a job and perhaps seeking work in a more worthy profession.

One good turn, deserves another.

Or rather, I would say odious accountants who think they're godsend and the best thing since sliced bread ought to Foxtrot Oscar.

I would learn accounting except I see no need to learn about the pretzels of human taxation that are simply a contrivance of Communist bureaucracies that seek to create unnecessary non-jobs and fund their wasteful spending.

Tax as it is, is too much and unnecessarily complex.

He is fully deserving of my scorn, particularly since he seems to think so highly of himself.

LOL, I challenge Polska Saxton name me *one* significant contribution accountants have made to society.

Remember, you were the person who made the ridiculous comments about cash and "gifts".

You seem to think accountants only deal with tax. Is tax that bad? How do you suggest that the armed forces and the police should be funded?

Plenty of accountants deal with preparation of statutory accounts, management accounts, payroll, business plans, cash flow forecasts, etc.

Nobody has to use my services. They use them because they judge they are useful to them.

What is it that you do that's so useful?

Obviously you don't know my wife. You seem like one of these people who thinks that a lack of knowledge is no reason to refrain from having an opinion. It's worth remembering that people will treat your opinions with the respect they deserve.

You don't seem a very happy fellow.

Like what you did when making comments because you never worked out what I do for a living.

Hypocrisy has a habit of comming back to haunt you.

Why should I work out what you do for a living? If you are too ashamed to tell that is your business.

I have the utmost respect for the laws of nature and morality. In terms of ethics, two people are entitled to give financial gifts to each other and I am entitled to charge lower than market rent to a friend. What so wrong about that?

Most tax is superfluous. The only legitimate tax-funded state entities should be the armed forces and parts of the judiciary. There is no need for police as armed human collectives will eventually settle down into an equilibrium.

Oh dear, you're really scraping the bottom of the barrel there to justify your profession's existence. Let me say for a fact that none of what you mentioned can exclusively be done by an accountant but rather anyone with a smattering of intelligence can do it too.

My eldest son had a keen ear and listened to his father's advice to not be subservient to other people as an employee. He now runs a SME and initially did the accounts himself, getting an accountant to only rubber stamp it. He did not qualify as an accountant but learnt the ropes himself.

And I certainly didn't need an accounting degree to balance my own personal accounts. All it took was a little bit of grey matter.

No, they use your services because they have to. Don't delude yourself over that. Do you think your job would exist in a less convoluted tax system?

I was a combat engineer when I was much younger. After bleeding one time too many for this great and wonderful country I left the armed forces with a nod from my superiors. I impressed the right people and brought my practical knowledge to continue work in a related field.

I've met enough Polskas in my life to know to never trust one as far as I can throw them and to have an opinion or two about Polska manners.

Do you think I care about respect?

LOL, what could you possibly say to me that would make me feel unworthy? Please try.

I am satisfied that I have lived a fulfilled and productive life, and even in my relative fiscal poverty I'm a damn sight wealthier than even Fred the Shred with his ill-gained millions. You couldn't pay me enough to live his life.

Meeting someone who does a non-job is just another daily annoyance. Meeting someone who does a non-job and has the cheek to be arrogant about it, is another.

Go pick up a cause like animal rights, recycling or tree hugging. It might give some justification to your pathetic existence, as you're certainly not getting that from your job, lol.

I'm sure you know. You would rather just not admit the truth.

You don't seem to have any common sense in your comments.

Plenty of people come on here saying they know enough about this and that but they get found out.

Are you an employee?

So you are saying he learnt everything you would need to know to prepare statutory accounts simply to prepare one set of accounts? Sounds pretty stupid to me.

I think "balancing" says all I need to know about how limited your knowledge is.

They don't have to.

I can tell that you strive to impress by words rather than deeds.

You don't think that they maybe they have rumbled you steer a wide berth.

I think you do because you come on here trying to impress but make yourself look stupid.

I don't have to. It's within your own mind.

You think anybody believe any of your bullshit?

I'll carry on with my life as it is thank you. Every now and again you'll pop up, spout some rubbish, and see an opportunity to deflect your thoughts from your down-trodden existence and, with the help of the computer, tell the world how wonderful you are.

I would have stated it if you asked, but you preferred insults at the time. Why should I now bother to enlighten somebody who prefers insults to education?

So you pay for your own private ambulances and expect to pay before anybody puts out a fire for you. I sometimes wonder at the education people are receiving these days.

I suppose in his world the prime minister is paid for privately, too! It's obvious this guy doesn't have a clue about life but lives in his own little dream world.