Income from a spare room?

An increasing number of the over 60s are picking up extra income by renting out a room in their house. This can make a lot of sense if, for example, children have left home (although they do seem to return!) yet you do not want to down-size or move. We have previously looked at ways of raising money on one’s home, by various mortgage schemes and equity release, but renting out a room may be less onerous. This scheme allows one to earn a tax-free income, even if you yourself are renting your home.
If you do rent out a room in your home, you can get up to £4,250 tax free income. A government scheme called Rent A Room was specifically designed to encourage people to take in lodgers. The basic rules are:
· You let out a room or part of your main property (it can be more than one room but not a self-contained flat).
· It must be furnished, an unfurnished room or rooms don’t qualify.
· You don’t have to own your home, if you have your landlord’s consent you can take advantage of the scheme as a tenant.
· If you don’t normally fill out a tax return and the income from letting is below £4,250 (around £350 a month) you don’t even have to do anything, the tax exemption is automatic.
· If the amount you earn from the let is above £4,250, just let your tax office know.

If you usually fill out a tax return then the scheme may not benefit you. You cannot offset any of the expenses of renting the room against the income, so wear and tear, insurance costs, any furnishing or decoration cannot be deducted from the income.

There are several websites which specifically deal with finding rooms and tenants under this scheme, or of course you could try the local paper or a more general community website.

Influence the care debate?

Oscaruk has had a clear response to our question about care for the elderly.

You now have the opportunity to influence government policy on this issue, as ‘The Big Care Debate’ is being rolled out across the country. There is a website – www.careandsupport.direct.gov.uk - which gives details of the meetings which are being held for public consultation, and through which you can make your own views heard by the government.

There is also a leaflet with a questionnaire, which may be distributed through workplaces, or other organizations. If you want a copy of this, or more than one copy to distribute, go to www.orderline.dh.gov.uk and quote 297527/Join the big care debate – quick guide.

We get few enough opportunities to make a real influence upon government policy, and in such a massively important topic, it does seem worth the trouble to take an active part.

One little grumble; so many government questionnaires ask for our ethnic origin or group. I never fill this in on census forms, and it appears again on the questionnaire with this document. It is such a meaningless phrase, and is one of those attempts at political correctness which only go to make the underlying problem worse.

Since my recent discovery that one of my ancestors was a mounted archer during the Hundred Years War – on the English side – I guess English is my ethnic origin, even though one grandmother was Welsh. ‘Ethnic’ can relate to either a race or a nation, and I do wonder which the government wish me to use. Granny makes me a bit of a Celt, so to speak, and it is always possible that William Douce, mounted archer, was a French mercenary. Uncle Guillaume. That might mean he was Norman French, so he would actually be descended from Vikings.

Really, if they want to know what colour I am, I’m mostly pink with some browner bits during summer. I don’t know what information they are looking for with the question, and as someone who has worked on questionnaires since around 1968, if I can’t figure it out, nobody else will. Much better to forget about issues of race, and concentrate on delivering a robust system of care for the elderly.

Tried Opening a Bank Account Recently?

I guess that a lot of older people are suffering from the fall in interest rates on bank savings accounts – sensible advice is always to shop around for the best rates, especially when some accounts are offering virtually nil interest. If you can tie money up over a number of years, then slightly better rates are on offer, but for instant access, things are grim.

The concerns about money laundering have made the whole process of shopping around vastly more difficult. I have tried to open accounts with the best rate suppliers twice, and in both cases given up the attempt as, by the time they actually managed to get the account open, they were no longer offering the best rate.

I have made a new attempt to open an account with Alliance & Leicester, who are consistently pretty high on the rates chart for instant access savings. My error, about which I can do little now, is that my wife is Dutch. She has lived in the UK for around 20 years, has had a bank account with another bank in the same group as A & L for 9 years or so, runs a business here, and is even on the parish council of the village where we have lived for 10 years. However, the moment a bank hears that an alien is trying to open an account, shutters go down everywhere.

I filled in the required information on the internet. A letter then came through asking for further confirmation of identity and address for her, with a need to have this countersigned by someone with ‘Status’ – a very odd mix of professions qualifies for this. We pestered our solicitor neighbour for this service. Off this went, and then another letter came through saying that even more information was need – in fact two letters with utterly contradictory requirements came though.

Sensible thinking – we went to a branch of A & L, where they apologised but said it was nothing to do with them, as it was an online account, and they couldn’t understand the two letters either. However, they agreed to copy the pile of documents we carried, and to send them off by internal post.

Now, five weeks after the initial attempt to open the account, I have phoned them to see what is happening. I am told that they often take a long time, and to leave it to the end of the week and check again. Well, thanks, but I had noticed that it takes a long time. During that time, our savings sit in an account with 0.15% interest.

I understand the desire to avoid money laundering, but wonder why it should be assumed that the holder of a Dutch passport is more likely to try this than the holder of a UK one; and why it is assumed that an international drug dealer should be incapable of getting a utility bill in his name, or should not have a passport? Couldn’t the banks agree on one set of proof, and once it is passed, accept it for any new account?