Rent-a-room and tax deductions

Collapse
X
 
  • Filter
  • Time
  • Show
Clear All
new posts

    Rent-a-room and tax deductions

    Trying to settle a debate :-

    I am aware that claiming rent-a-room relief precludes the deduction of expenses for that property such as utilities, GSC, etc.

    However, my accountant has stated that I cannot deduct an amount for use of my own property for business purposes, since I am claiming rent-a-room relief. I am dubious about this. To me, this is a business cost, not a property cost.

    As a hypothetical example, say I ran a web design business from home, and I let a room under the rent-a-room scheme. If I claimed rent-a-room relief, would this prevent me from making a tax deduction from my web design income for the use of my home for business purposes?
    There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

    #2
    The point of the Rent a Room scheme is that the landlord isn't running a business, it's a non-commercial arrangement.
    So you aren't using part of your property for running a business unless you have another business (like a web design business).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      I am not suggesting that Rent-a-Room is a business (...and that is, I guess, part of the point of my question).

      I am aware that claiming rent-a-room relief precludes the deduction of expenses for that property such as utilities, GSC, etc. However, my understanding/assumption is that this remains separate from any business that the householder may operate from home. I would not expect rent-a-room to impact the finances of such a business.

      Say I ran a web design business from home, and I also let a room there under the rent-a-room scheme. If I claimed rent-a-room relief, would this prevent me from making a tax deduction from my web design income for the use of my home for business purposes?
      There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

      Comment


        #4
        The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else. You can let out as much of your home as you want.

        So your web design business wants to rent a a room in your house and volunteers to pay £7500 to rent a room. So your business will make £7500 less profit and you get the money tax free , under rent-a-room scheme. What a clever idea !

        Comment


          #5
          Originally posted by doobrey View Post
          Say I ran a web design business from home, and I also let a room there under the rent-a-room scheme. If I claimed rent-a-room relief, would this prevent me from making a tax deduction from my web design income for the use of my home for business purposes?
          No, I believe you would be able to claim an allowance of £4 a week against the income from that business.
          When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
          Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

          Comment


            #6
            Originally posted by jpkeates View Post
            No, I believe you would be able to claim an allowance of £4 a week against the income from that business.
            Thanks. That is what I thought.
            There is a fine line between irony and stupidity. If I say something absurd please assume that I am being facetious.

            Comment

            Latest Activity

            Collapse

            • Is changing carpets to laminate flooring tax deductible?
              by anqi_z
              Hello,

              Carpets in a let property has worn out and I am considering to replace it with laminate flooring.
              Could anyone advise if this will be tax deductible (assume this won't be considered as improvement)?


              Thank you....
              25-05-2020, 19:16 PM
            • Reply to Is changing carpets to laminate flooring tax deductible?
              by Freeholder is king
              If your lease says that the floors need to be carpeted then you got no choice. If it does not then you can and the noise problem is not your issue it depends on what is in your lease. Yes
              31-05-2020, 11:23 AM
            • Reply to Is changing carpets to laminate flooring tax deductible?
              by Gordon999
              Carpets are better for sound insulation between ground floor flat and first floor flat in old house conversions.
              31-05-2020, 08:51 AM
            • Reply to Is changing carpets to laminate flooring tax deductible?
              by jpkeates
              I find that using expensive and long lasting underlay under cheaper carpet works best.
              It feels nice and luxurious and insulates well, and replacing the carpet is less traumatic on the bank balance.
              30-05-2020, 12:25 PM
            • Reply to Flipping a property
              by Jerome2020
              It's not strictly true that a company must be used where there are more than four owners. Where there are more than four parties with an interest in a property, the first named four are treated as holding the land on Trust for the remaining beneficial owners; good documentation is essential to avoid...
              30-05-2020, 11:56 AM
            • Flipping a property
              by Gray
              My son and I are thinking of buying a property together and renovating it. We were intending to rent it out but now are thinking about just selling it again once work is finished. If we purchase property in three names (our’s and his partner’s), we would get three capital gains allowances is that...
              18-05-2020, 17:53 PM
            • Reply to Is changing carpets to laminate flooring tax deductible?
              by blinko
              Yeah I prefer carpet too, but the rate at which tenants seem to be able to destroy carpet compared to laminate.....
              30-05-2020, 11:50 AM
            • Reply to Is changing carpets to laminate flooring tax deductible?
              by Lawcruncher
              Funny how fashions change. Fifty years ago having fitted carpet had a social cachet, now everyone wants laminate flooring. I know it looks nice, but so do carperts. It is fine in a conservatory with cane furniture, but it makes a lounge look clinical. It also increases your central heating costs.
              30-05-2020, 07:51 AM
            • Reply to Flipping a property
              by Gordon999
              Land Registry only allows 4 names maximum on the property title.

              If more than 4 names , you would need to register under company name and the members in the group become shareholders.

              The members can be shareholders with one £1 share each and the company borrows the funds...
              30-05-2020, 05:59 AM
            • Reply to Flipping a property
              by jpkeates
              If the property title was a joint tenancy, anyone not contributing to the purchase would have received the ownership as a gift and would be an owner as a matter of fact.
              29-05-2020, 16:26 PM
            Working...
            X