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Where Taxpayers and Advisers Meet

Paying tax

BarryTiptree
Posts: 3
Joined: Tue Sep 22, 2015 1:31 pm

Paying tax

Postby BarryTiptree » Tue Sep 22, 2015 1:38 pm

Hi

We are not a registered business. Myself and my wife both receive company pensions

Mine is just above the tax threshold and I pay a very small amount of tax on my pension.
My wife is under the threshold and she rents a room out under the ‘rent a room scheme’ and uses the balance of her tax threshold so she doesn’t pay any tax or need to do any tax return.

My question is:
We are also thinking of taking a lodger who would stay four nights a week. From a building company. If the payment (cash, cheque, bank transfer) is made over to me how do I go about paying the tax or can I just ask the building company to deduct tax at source?

Any advice would be helpful.
Many thanks.

King_Maker
Posts: 6538
Joined: Wed Aug 06, 2008 3:22 pm

Re: Paying tax

Postby King_Maker » Tue Sep 22, 2015 1:56 pm

I assume she must own your home in her sole name?

If not (and the rent is above £4250), then the relief is split 50:50.

Why is the "lodger" part of your question relevant? RAR only applies to a single lodger (in HMRC's view).

BarryTiptree
Posts: 3
Joined: Tue Sep 22, 2015 1:31 pm

Paying tax

Postby BarryTiptree » Tue Sep 22, 2015 5:28 pm

Hi
Yes the home is in my wife’s sole name. She uses the rent a room scheme to earn below £4250. Therefore she does not have to declare anything.

I pay tax and wanted to know what options are open to me
if the proposed lodger (staying 4 nights a week) makes the payments in my name, how do I pay the tax on those payments?

Do I have to fill in a tax return or can the company making payments deduct tax at source? or there any other options.

Thanks

jpcentral
Posts: 924
Joined: Wed Aug 06, 2008 3:28 pm
Location: Loughborough
Contact:

Re: Paying tax

Postby jpcentral » Tue Sep 22, 2015 6:06 pm

If your wife owns the property how can you rent a room in it to someone else unless your wife rents it to you first? But that is getting very complicated.

It doesn't matter who the new tenant pays the rent to, the income is your wife's and needs to be declared by her on a tax return. There is no facility for the tenant to deduct tax at source.
John Perry
Central Business Services
Loughborough
http://www.centralbusiness.co.uk

BarryTiptree
Posts: 3
Joined: Tue Sep 22, 2015 1:31 pm

Re: Paying tax

Postby BarryTiptree » Tue Sep 22, 2015 8:53 pm

Many thanks.
Regards
Barry


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