Rent-a-room scheme income declaration

pasquale83

Hello Folks, I have started to rent out a room in my house and I want to avail of the rent-a-room scheme. As far as I have understood, if the total income is up to 12 grand a year I do not have to pay any taxes on it.

I am wondering if I still need to declare the income to Revenue and in case how. I am a PAYE and I have never submitted a tax return form before.

Thanks for your help, I will really appreciate it.

pasquale83

Just having a look on citizensinformation.ie. It looks like I don't have to do anything...but I am not sure about the last statement. Do I still need to notify Revenue that I want to avail of the rent-a-room scheme for this tax year?

Here is the link to the webpage: http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html

If you make an annual tax return, you should record your rental income for rent-a-room relief in the ‘Exempt income’ section of your tax return form at the end of the tax year and return the completed form to your local tax office. The tax office can answer any queries you may have and will help if you have any difficulties completing the form.

If you do not make an annual tax return and your income from rent and related services is under the exemption limit, you do not have to claim rent-a-room relief as it will apply automatically.

If you wish to opt out of the rent-a-room relief in a particular tax year, you must notify Revenue in writing, on or before the return filing date for that tax year. If you make an annual tax return, you opt out by marking the relevant box in the ‘Exempt Income’ section of the return – otherwise write to your tax district to say that you do not wish the relief to apply for that year. Read more here (pdf).

filbert the fox

pasquale83 wrote: »

Just having a look on citizensinformation.ie. It looks like I don't have to do anything...but I am not sure about the last statement. Do I still need to notify Revenue that I want to avail of the rent-a-room scheme for this tax year?

Here is the link to the webpage: http://www.citizensinformation.ie/en/housing/owning_a_home/home_owners/rent_a_room_scheme.html

From Revenue website:

You can opt out of the relief for a year of assessment by making an election on or before the return filing date for the year of assessment concerned.

If you claim relief you must provide details of the relevant sums on your annual tax return, notwithstanding that the profits or losses from the letting(s) are disregarded for income tax purposes

So confused yet? me too. Seems like a phone call to revenue to clarify before you get any nasty communications.

Make sure you don't earn over €12,000 otherwise you're in a different ball game and will be lumbered with 52% tax on earnings.

snubbleste

I thought it was obvious.

You have to declare all income to Revenue.
You declare that you received €X amount per annum rent & bills. Then state you are availing of the rent-a-room relief exemption.

Mrs OBumble

The usual return of income is the Form 11. Revenue may also require certain individuals who are taxed under the PAYE system and who also have non-PAYE income to submit an annual return of income (Form 12).

Ref: http://www.revenue.ie/en/about/foi/s16/income-tax-capital-gains-tax-corporation-tax/part-07/07-01-32.pdf

So ring up Revenue, and tell them what you need to do, and ask them to send you the right form.

They will likely encourage you to register for ROS - this makes doing returns easier, but is a pain to register for (needs a certificate on your computer which needs to be validated with a code that they post you in the snail mail). Nett effect is that you're locked out for a while (days, not hours) if you need to use a different computer.

filbert the fox

snubbleste wrote: »

I thought it was obvious.

You have to declare all income to Revenue.
You declare that you received €X amount per annum rent & bills. Then state you are availing of the rent-a-room relief exemption.

If you do not make an annual tax return and your income from rent and related services is under the exemption limit, you do not have to claim rent-a-room relief as it will apply automatically

So Citizen's Information is wrong?

snubbleste

Nope, you have to declare all income.
You then have to claim the relief.

pasquale83

snubbleste wrote: »

Nope, you have to declare all income.
You then have to claim the relief.

That makes sense to me and it has been my first thought indeed. But Revenue and citizeninformation.ie website phrasing is misleading IMHO.

I will ring Revenue and will update the forum then.

Thanks ALL for the replies!

relax carry on

pasquale83 wrote: »

That makes sense to me and it has been my first thought indeed. But Revenue and citizeninformation.ie website phrasing is misleading IMHO.

I will ring Revenue and will update the forum then.

Thanks ALL for the replies!

The bit from the Revenue website above tells you if you are claiming the rent a room relief you must declare it in your annual tax return.
It also tells you if you want to opt out of it, you must also notify them as the rental income will then become taxable.

In your case a form 12 will suffice. You can use a paper one or use the Eform 12 via PAYE ANYTIME. No need for ROS registration.

pasquale83

relax carry on wrote: »

The bit from the Revenue website above tells you if you are claiming the rent a room relief you must declare it in your annual tax return.
It also tells you if you want to opt out of it, you must also notify them in your tax return as the rental income will then become taxable.

In your case a form 12 will suffice. You can use a paper one or use the Eform 12 via PAYE ANYTIME. No need for ROS registration.

Thank you relax carry on. I just rang Revenue and the information you provide matches what they just told me.

As a PAYE I don't have to declare wages in the form as they are already accounted through the PAYE system.

pasquale83

Just one more question for you guys. What are the key dates to submit Form 12? Any idea? Thanks!

filbert the fox

pasquale83 wrote: »

Just one more question for you guys. What are the key dates to submit Form 12? Any idea? Thanks!

31st Oct 2016 for this year's income

pasquale83

filbert the fox wrote: »

31st Oct 2016 for this year's income

Thanks!

Victor

filbert the fox wrote: »

Make sure you don't earn over €12,000 otherwise you're in a different ball game and will be lumbered with 52% tax on earnings.

More correctly, the taxpayer would have to pay at their highest tax rate - for all we know, the OP has no other taxable income.

pasquale83

Guys, I have another question on the scheme. I see that F12 has a dedicated section for the rent-a-room income delcaration. Do I need to provide any supporting document to attach to the form when submitting it? I get paid by electronic bank transfer, do I need to provide the bank statements? Thanks!

relax carry on

pasquale83 wrote: »

Guys, I have another question on the scheme. I see that F12 has a dedicated section for the rent-a-room income delcaration. Do I need to provide any supporting document to attach to the form when submitting it? I get paid by electronic bank transfer, do I need to provide the bank statements? Thanks!

No supporting documentation is required unless specifically asked for by Revenue.

pasquale83

relax carry on wrote: »

No supporting documentation is required unless specifically asked for by Revenue.

Thanks for the clarification.

pasquale83

Hello Folks, I am just filling out the eForm12 for this year declaration.

I just need a quick confirmation:

- the amount I should input is the total amount transferred into my account, including shared expenses refund (not only room rent)?

- should I put the amount above only in the tax credit and relief section of the eForm (I mean, not also in the non-PAYE section of it)?

Thanks!

BabySlam

Yes it is the total you received which is relevant - not what you spent it on. Here is how Revenue put it:

Sums arising to an individual in respect of the letting, for residential purposes, of a room or rooms in his/her home, including, for example, sums arising from lettings to students for an academic year, and the provision of meals or other services supplied in connection with the letting, may be exempt from income tax where they meet the conditions and are below the annual limit for the tax year in question

Baby01032012

filbert the fox wrote: »

31st Oct 2016 for this year's income

31 October 2016 for last years (2015) income. If youve only started letting this year OP - you wont declare it until 2017 when youre doing your return for 2016.

pasquale83

BabySlam wrote: »

Yes it is the total you received which is relevant - not what you spent it on. Here is how Revenue put it:

Sums arising to an individual in respect of the letting, for residential purposes, of a room or rooms in his/her home, including, for example, sums arising from lettings to students for an academic year, and the provision of meals or other services supplied in connection with the letting, may be exempt from income tax where they meet the conditions and are below the annual limit for the tax year in question

Thanks. I have declared only the income from the room rent.

athtrasna

pasquale83 wrote: »

Thanks. I have declared only the income from the room rent.

You need to add in any bill payments as well

pasquale83

athtrasna wrote: »

You need to add in any bill payments as well

OK. I didn't. Can I request revenue to unlock the form again for me to amend it? Anyway the total amount including bills as well doesn't exceed the 12k threshold, so shouldn't be really a problem (I am well below last year, between 1k and 2k).

LG1234

I'm submitting this now, just so I'm sure I put the room rental total in as 'rental income' and then add a tax credit of rent a room for the entire amount?

pasquale83

LG1234 wrote: »

I'm submitting this now, just so I'm sure I put the room rental total in as 'rental income' and then add a tax credit of rent a room for the entire amount?

I just added a tax credit as per Revenue instruction on the phone

y0ssar1an22

relax carry on wrote: »

The bit from the Revenue website above tells you if you are claiming the rent a room relief you must declare it in your annual tax return.
It also tells you if you want to opt out of it, you must also notify them as the rental income will then become taxable.

In your case a form 12 will suffice. You can use a paper one or use the Eform 12 via PAYE ANYTIME. No need for ROS registration.

sorry for dragging this off topic.

this is probably something i should know, but whats the difference between form 11 and form 12?

thanks

Baby01032012

y0ssar1an22 wrote: »

sorry for dragging this off topic.

this is probably something i should know, but whats the difference between form 11 and form 12?

thanks

Form 12 is where person has mainly paye income. Form 11 for example sole trader etc