Paying tax

[BarryTiptree]

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]

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]

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]

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.

[BarryTiptree]

Many thanks.
Regards
Barry