Tax Cut Makes Rent a Room Scheme Even More Attractive

If you rent out a spare room, whether to a lodger or to holiday or business travellers, there is good news in store.

The Rent a Room scheme has since its introduction a few years back offered the opportunity to earn extra income. It’s a programme that is open to owner occupiers or tenants of rental properties (whose tenancy agreement allows) who are able to let furnished accommodation to a lodger.

Up until now, the scheme has allowed the people doing the renting to earn up to £4,250 a year tax free, or £2,125 if renting out jointly. This amount has been frozen since 1997. However, from 2016 this amount is set to rise to £7,500 and £3,250 respectively.

The additional allowance is worth £1,300 a year to a higher rate taxpayer, and £650 a year to a basic rate taxpayer.

Who Qualifies for the Rent a Room Scheme?

As long as the property is your main residence and the room you are renting is furnished, you are permitted under the scheme to earn up to £144 per week in rent. If you are a tenant rather than a homeowner, then you will need to have a clause in your tenancy agreement allowing you to rent a room.

According to Spareroom.co.uk it is estimated that in England there are 19 million empty bedrooms, many of which are in the homes of pensioners who find themselves unable to downsize. A lot of the other empty rooms belong to ‘empty nesters’ whose older children have flown the nest.

What you Need to Know About Tax

If you are earning less from renting a room than the threshold of the scheme - £7,500 per year from 2016 – then you don’t need to do anything as your exemption from tax will be automatic.

However, if you are earning more than the threshold, then you will need to complete a tax return. In doing so, you can either choose to opt in to the Rent a Room scheme, in which case you will need to state this on your tax return so you can claim your tax-free allowance, or you can decide not to opt in, in which case you just set down your income and associated expenses using the property pages of the tax return.

If you are new to tax returns then you will need to contact HM Revenue & Customs (HMRC) to request one, and you can do this using this link.

  

Of course, your local bookkeepers will be a mine of information and advice on the subject, so why not seek out their help?

Does your Company Logo Actually Belong to your Company?

Most businesses have a logo these days; even the smallest companies appreciate the importance of carrying an identity to reinforce their brand.

Logos form a significant part of the marketing armoury because they allow people to instantly recognise a business. When you see the Lacoste crocodile for example, or the bitten-into Apple logo, you know straight away who you are dealing with. These examples work at all levels of the business scale and demonstrate how valuable a logo can be.

With this in mind, it may come as something of a surprise that in some cases, companies don’t actually own their own logos. Here is a story to illustrate what we appreciate has probably come as something of a shock to you.

An Innocent Tale

Travel back in time in 1998 when smoothie maker Innocent was a new business. It commissioned a logo to be designed by a branding company, which produced the now well-known halo/face design. The two parties liaised over how the designers would be paid for their work, but no contracts were ever signed and no money changed hands.

Two years later in 2000, Innocent applied to register its logo as an EU trade mark. At first the registration was accepted, that was until the company that had designed the logo applied to cancel the registration, claiming that they were the rightful owners of the logo. Innocent could not own the logo trade mark, because no copyright had been assigned.

What the Law Says

According to UK copyright law, when a business commissions a design agency to undertake any type of design work, the designer is deemed to own the copyright on the designs, unless an agreement to the contrary has been signed.

Whilst the party doing the commissioning retains an implied licence and with it a right to use the logo once they have paid for its design, the intellectual property rights do not automatically become the property of the commissioner, unless there is a contract stating otherwise.

What to do?

Every time you commission any design work, you need to request written assignment of copyright from your design agency courtesy of a contract agreed and signed by both parties.

Check ownership of your current logo and branding work. If you are not clear who owns it then talk to a lawyer about having a copyright assignment contract drawn up to present to your design agency. Your logo is valuable: make sure you own it!

Dealing with E-Cigarettes in the Workplace

Employers are having a hard time dealing with the scenario of e-cigarettes in the workplace, for numerous reasons.

Action on Smoking and Health (ASH) says that in the region of 2.1 million adults in the UK use e-cigarettes, which raises the question of whether or not a company’s smoking policy should differentiate between the use of traditional cigarettes and e-cigarettes.

What is the Legal Position on E-Cigarettes?

Because the act of smoking involves a substance being burnt, e-cigarettes fall outside the scope of smoke-free legislation. Because of this, companies can make their own decisions as to whether to allow employees to use e-cigarettes at work.

Considerations When Creating a Smoking Policy

There is plenty to consider on the subject of e-cigarettes when putting together your smoking policy.

Firstly, you should bear in mind that some workers may be using e-cigarettes as part of a smoking cessation plan. For this reason, you may wish to support their use.

Next up, you have to think about other employees. They may find the vapour irritating, and there may be a health risk through passive consumption. There is little research at this stage as to whether there are any health risks associated with inhaling the vapour from e-cigarettes, but it is still something to consider.

E-cigarettes can be very similar in appearance to traditional cigarettes which may lead to other employees or visitors to your premises thinking that smoking is going on in the workplace. Even if you do allow staff to use e-cigarettes then it would be a good idea to put a layer of management approval in so that it is known who is using them for the purposes of distinguishing between those and traditional cigarettes.

If you are going to allow employees to use e-cigarettes in a designated area, then you will need to think about whether it should be the same area used by traditional smokers. Taking into consideration the fact that e-cigarette users are fairly likely to be attempting to quit the use of traditional cigarettes, they may find it difficult to be around traditional smokers. It may be an idea to create separate areas.

Take Advice When Drawing up Smoking Policies

Whatever you decide to do, you need to be clear on your rules and set out policies that everyone understands. Talk to your employment lawyers who will help you draw up policies in accordance with the approach you settle upon, and that stay in line with the law.