Tax on rental income?

It is incurred as a result of 2 or more non-exempt persons occupying the property. When there are 3 such occupants, then typically one of them is the responsible person who must ensure that the full amount gets paid, and must stump up if one or both of the others don't. But internally the three can agree how to split it, and the usual arrangement would be that each is responsible for a third. For the purposes of this discussion I am assuming that such an arrangement is in fact in place.

Of course the CT bill isn't wholly incurred for the rental business, but it isn't one indivisible thing because it is capable of being apportioned. The lodger's portion is wholly incurred.

The full charge *was* paid by the resident owners before they decided to take in a lodger. Once the lodger was installed, the full charge is now paid by all three, so the owners are paying only two thirds of what they were paying before.

True, the charge hasn't gone up, but the couple's share of it has gone down by a third. So what? A third of it is paid by the landlord

In a similar vein, the property's heating bill may not have gone up as a result of the lodger moving in (or not by much), but his gross rent will include a 1/3 share of the heating bill. You're not telling me this would be disallowed too, are you?

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Less than two years ago.

As a matter of interest, is this the result of a change in the law, or are they simply recognising that they've previously interpreted the law wrongly?

I suppose it boils down to interpretation specifically of the meaning of "wholly and exclusively" and of what things are capable of being apportioned and what things really are indivisible.

It wasn't due to a change in the law. They had seen there were many different ways of calculating expenses for home offices so they wanted to set out what could be claimed and methods of calculation. At the same time they seemed to have a rethink of how they should treat telephone rental costs. They did explain their reasoning behind it at the time but it's not easy finding it on their website.

Try this page for Council Tax

If you live in a bigger house than you otherwise would so that you can run a lettings business from it, then the council tax bill may well be bigger as a result.