Where Taxpayers and Advisers Meet

Lodger (Rent a room scheme) affects Working Tax Credits?

foxy_red
Posts: 3
Joined: Thu Oct 30, 2008 12:47 pm

Postby foxy_red » Sat Aug 23, 2008 4:51 am

Hi,

I have my own limited company and receive a small £5k salary from the business. I also receive Working Tax Credits.

I am now advertising for a lodger and know I can receive £4250 pa tax free under the rent a room scheme but can not find anywhere if this affects my Working Tax Credits.

Can anyone please advise?

Thank you

robbob
Posts: 2173
Joined: Wed Aug 06, 2008 4:01 pm

Postby robbob » Sat Aug 23, 2008 5:50 am

Hi foxy

Providing the amount you receive is less than 4250 then you can ignore this income - See TC600 notes page 26.

http://www.hmrc.gov.uk/forms/tc600-notes.pdf

I would GUESS if your income is above this level then you only declare the excess, if this is the case i would get this confirmed by the helpline.

Remember if you do take divis from your company then these need to declared too.

Peter D
Posts: 10150
Joined: Wed Aug 06, 2008 3:37 pm

Postby Peter D » Sat Aug 23, 2008 7:01 am

Although the £4250 may be free of income tax it is still income so it may count against your tax credits. As robbob suggests, use the help line. Regards Peter

foxy_red
Posts: 3
Joined: Thu Oct 30, 2008 12:47 pm

Postby foxy_red » Sat Aug 23, 2008 7:06 am

Many thanks guys. I didn't think the helpline would be open outside office hours but amazingly for a gov dept it's open 7 days a week, so I double checked & robbob is correct.

Anything over the £4250 counts as `other income'.

Thanks again for your fast, friendly & accurate answers :oD

Foxy x

Peter D
Posts: 10150
Joined: Wed Aug 06, 2008 3:37 pm

Postby Peter D » Sat Aug 23, 2008 7:19 am

Did you ask them specifically with regard to Tax Credits. 'Other income' may be purely for income tax purposes. Regards Peter

foxy_red
Posts: 3
Joined: Thu Oct 30, 2008 12:47 pm

Postby foxy_red » Sat Aug 23, 2008 8:16 am

Hi Peter, Yes, I rang the tax credits helpline & fully explained. The £4250 from the rent a room scheme does not affect WTC but anything above this amount is entered as `other income' which does then affect the overall award.

Many thanks for taking the time to help.

Foxy x

Peter D
Posts: 10150
Joined: Wed Aug 06, 2008 3:37 pm

Postby Peter D » Sat Aug 23, 2008 12:04 pm

Cool. Regards Peter

wamstax
Posts: 1652
Joined: Wed Aug 06, 2008 3:39 pm
Location: Operate Nationally but based in Aberdeen
Contact:

Postby wamstax » Sun Aug 24, 2008 1:56 pm

Hi Foxy,
Did you get the name of the person providing the confirmation that the amount under £4250 did not affect WTC and the time and date of the call?
regards
bill@wamstaxltd.com
regards and hope this helps
bill@wamstaxltd.com
http://www.wamstaxltd.com
Operates Nationally with competitive costs


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