Rent a room and tax declaration.

James Bond Junior

Just wondering. I rent a room under the rent a room scheme. Someone recently informed me that I need to declare the income even though it is not taxable. I am a PAYE worker with a state job so I do not fill out tax returns. My partner also lives in the house and contributes towards the mortgage so therefore is also paying me every month. Do I need to declare this income? The combined rent/partners contribution does not exceed €14000 a year.

cronos

James Bond Junior wrote: »

Just wondering. I rent a room under the rent a room scheme. Someone recently informed me that I need to declare the income even though it is not taxable. I am a PAYE worker with a state job so I do not fill out tax returns. My partner also lives in the house and contributes towards the mortgage so therefore is also paying me every month. Do I need to declare this income? The combined rent/partners contribution does not exceed €14000 a year.

Think you need to declare everything you referenced as it's all contributions to the household. It's below 14k so no reason not to really. Takes 5 mins once a year online I believe if you are signed up to myaccount on revenue. Not sure how many years back you can do it for. Does anyone else know that?

Like could you not do it for 4 years then do all the 4 previous years?

Pkiernan

Just remember that the 14k per annum also includes shared bills etc.

Denny_Crane

Take proper tax advice, especially if you have arears.

I can't imagine your partner's contribution would need to be included. However I can imagine the arears may not be liable for relief if not properly declared on time. None of that should be taken as true, just my gut feeling on the matter. Take proper advice.

Sleeper12

Denny_Crane wrote:

I can't imagine your partner's contribution would need to be included. However I can imagine the arears may not be liable for relief if not properly declared on time. None of that should be taken as true, just my gut feeling on the matter. Take proper advice.

If the partner isn't on the mortgage and the partner is paying him money I'd imagine it needs to be declared. I don't think they are taxed as a married couple.
OP I believe everyone is technically supposed to file a tax return each year. Usually it's just enforced for self employed but it's a great habit to get into. You can claim tax relief from medical & a lot of detail as an example

James Bond Junior

Sleeper12 wrote: »

If the partner isn't on the mortgage and the partner is paying him money I'd imagine it needs to be declared. I don't think they are taxed as a married couple.
OP I believe everyone is technically supposed to file a tax return each year. Usually it's just enforced for self employed but it's a great habit to get into. You can claim tax relief from medical & a lot of detail as an example

I've claimed before for medical expenses etc on the online portal. Keep meaning to do it so I'll put that on my to do list this month.

Just in the shared bills, if lets say a bill was 90 split 3 ways so the lodger, my better half and myself paid 30 each, do I need to declare the 60 as monies received?

Sleeper12

James Bond Junior wrote: »

I've claimed before for medical expenses etc on the online portal. Keep meaning to do it so I'll put that on my to do list this month.

Just in the shared bills, if lets say a bill was 90 split 3 ways so the lodger, my better half and myself paid 30 each, do I need to declare the 60 as monies received?

I don't know the answer to that & I wouldn't like to just guess. If you don't get the answer here I'm sure there is an accountancy forum

riclad

You are required to send in a tax return ,use tax form 11 ,
you have to show your rental income is below 14k plus utility bills ,you can get the form at any tax office.
You put your income from your job on it, theres a page for rental income .whether your partner pays part of the loan is irrelevant as theres no tax on rental income under 14k . 14k includes utility bills paid by tenants .
You work at a job and pay paye tax and usc,
this tax return is really to declare your rental income .
My advice is declare the rental income from the tenant .
And the bills paid by the tenant .
You may need to send in a tax return for the past few years .
my friend sent in 4 tax returns for 4 previous years as she did not know
she needed to make a tax return on rental income.
She did not get fined , her rental income is under 12k
She got a letter back from the tax office , tax owed is zero on rental income
She works in an office full time and pays tax ,paye,usc etc
She now sends in a tax return at the end september every year for the previous year.
You must make a tax return ,you could be fined for not making one,
even if your tax bill is zero euros .
IF your rental income plus bills is under 14k , my advice is just put
your mortgage payment total on the return if there is a line
loans or mortgage payments .
see www.revenue.ie form 11.

http://www.revenue.ie/en/tax/it/leaflets/it70.html


If you let a room (or rooms) in your sole or main residence as residential accommodation, including for example, rooms let to students for the academic year, and the gross amounts receivable ("relevant sums"), including monies for food, laundry or similar goods and services, does not exceed the exemption limit for the year of assessment in question (€12,000 per annum from 1 January 2015), the profits or losses on the relevant sums are treated as nil for income tax purposes. Thus, profits are disregarded for income tax, PRSI and USC purposes and losses cannot be offset against rental profits from other lettings.


note before 2015 the rent a room limit was 12k.
i think 2016 limit is 14k.
As you may need to send in tax returns for the last 4 years.
i,m not sure when it changed from 12 to 14k.

basically the purpose of the tax return is to show the rental income plus bills ,is under the limit
In ORDER TO Prove you owe no tax on the rental income .

Your rental income is treated as totally separate from your paye income ,
hence the need to make a tax return

it might be wise to put down the payment from your partner as rental income .
maybe go to an advice centre ask about this .
Are you married or just living together?
Does your partner have her own bedroom

Emme

Euro14,000 a year tax free is not to be sniffed at. Depending on your income you would have to earn Euro28,000 in taxable income to make that money. You definitely need to declare the income for renting a room. Does your partner also have a room in the house or do they share a room with you? If they have a room (regardless of whether they sleep in it or not) you need to declare the income you get from them. If you have an unoccupied bedroom in the house it is probably best to declare the income from your lodger and your partner as well.

If things went belly-up with your partner they could report you for not declaring the money.

Sleeper12

riclad wrote:

note before 2015 the rent a room limit was 12k. i think 2016 limit is 14k. As you may need to send in tax returns for the last 4 years. i,m not sure when it changed from 12 to 14k.

Changed in last budget. Does anyone know if I'm right in thinking that if you earn 14001 in the year from rent a room that you pay tax on the whole lot? Op it's well worth keeping this in mind if I have it right

myshirt

€1 and above means the whole lot is taxable, yes.

Taylor365

Why are bills part of the €14k?

So it's not really €14k tax free, more like €13k.

athtrasna

Taylor365 wrote: »

Why are bills part of the €14k?

So it's not really €14k tax free, more like €13k.

It's total income

Avatar MIA

riclad wrote: »

You are required to send in a tax return ,use tax form 11 ,

Form 12 should be grand for a PAYE worker with rental income.

Taylor365

athtrasna wrote: »

It's total income

Utilities paid by tenants are taxable to the owner?

I don't understand.

myshirt

Taylor365 wrote: »

Utilities paid by tenants are taxable to the owner?

I don't understand.

It's exactly as you state it. All income received from the lodger. So rent, utilities, etc.

It's to prevent people pulling a fast one in relation to categorisation of the income.

Realistically, it shouldn't be an issue, 14k is a lot of money, what sort of a room or two rooms costs that?

exaisle

Taylor365 wrote: »

Utilities paid by tenants are taxable to the owner?

I don't understand.

If you're renting a room, the owner is responsible for the utilities because the bills are in his/her name..

However, lets assume that the rent received was 13900 net of a contribution to utilities and the tenant(s) contributed 1000 towards utilities, so the total receivable would be 14900, wouldn't the owner be an idiot not to give a discount on the rent to be sure that the total received is less than 14000?

Taylor365

exaisle wrote: »

If you're renting a room, the owner is responsible for the utilities because the bills are in his/her name..

However, lets assume that the rent received was 13900 net of a contribution to utilities and the tenant(s) contributed 1000 towards utilities, so the total receivable would be 14900, wouldn't the owner be an idiot not to give a discount on the rent to be sure that the total received is less than 14000?

Exactly, what else is Christmas for?

Or is it illegal to give your licensees a discount?

exaisle

Taylor365 wrote: »

Exactly, what else is Christmas for?

Or is it illegal to give your licensees a discount?

Why would it be illegal to give a discount if towards the end of the year you realised you were going to be over the tax free threshold and decided to reduce the rent for December to take advantage? That's legitimate tax avoidance.

davindub

exaisle wrote: »

If you're renting a room, the owner is responsible for the utilities because the bills are in his/her name..

However, lets assume that the rent received was 13900 net of a contribution to utilities and the tenant(s) contributed 1000 towards utilities, so the total receivable would be 14900, wouldn't the owner be an idiot not to give a discount on the rent to be sure that the total received is less than 14000?

Are you sure payment of bills are counted as income? Provision of meals and laundry services are specifically mentioned as income but 3rd party bills aren't.