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There Is Another Bedroom Tax Loophole

March 16, 2014

I think this is worth sharing. Who knows, it might help someone, somewhere, somehow. The question is why wasn’t it revealed from the beginning?

Social housing tenants can avoid the hated Bedroom Tax by using their spare room to set up a business.

Then they won’t have to pay an extra £14 a week because they can prove they are using extra bedrooms, the Sunday People reports.

Amazingly the loophole was revealed by a Government spokesman in the House of Lords.

Earl Attlee, who is a Tory despite being grandson of Labour post-war PM Clem Attlee, said: “The spare room subsidy encourages people to make full use of their property and to ­consider running a small business. I think that is highly desirable.”

But Shadow Welfare minister Chris Bryant said: “Instead of dressing up this unfair Bedroom Tax as a business opportunity, they should be scrapping it.”

Tenants would first need to get permission from landlords – their council or housing association.

4 Comments leave one →
  1. Lucid Intervals permalink
    March 16, 2014 4:56 pm

    Eh? Whoever came up with this bright idea is from another planet. The majority of people suffering from the ‘bedroom tax’ are claiming out of work benefits, especially the disabled who have been disproportionately effected. The moment you ‘set up a business’ you are no longer unemployed nor entitled to those benefits. You may well be able to claim in-work benefits such as tax credits, housing benefit etc. but in order to do so you will be expected to periodically report to the DWP/HMRC with proof of earnings and hours. Chances are you will be no better off for this and possibly worse off. How many small businesses actually run at a profit for the first year, if at all? Most of them run at a loss.
    There is a clause in the ESA rules allowing you to do a certain amount of ‘permitted work’ yet when you report this, which you are obliged to do, you are affectively declaring yourself ‘fit for work’ and hence risk having your claim scrutinised, reviewed and probably stopped.
    So no – this is could be a trap and a potentially hazardous one.

  2. tracy Roberts permalink
    March 16, 2014 7:01 pm

    so they get slammed with business rates instead……….. i do not believe it slipped out i think its a ploy to get people to try declare this to throw them off housing benefit altogether

  3. david permalink
    March 17, 2014 8:56 pm

    erm I know in my council and many others there is a term in the social housing contract, with the tennant, that a business can not be run from the property on risk of loosing said tennancy ie (from the following p14) 3 Living in your home
    a You must use the property as your only or main home.
    b We have the right to stop you using your home, or any part of it for
    anything other than living in.

    Click to access conditions%20of%20tenancy.pdf

  4. March 19, 2014 4:26 pm

    Ridiculous and very bad idea – anyone thinking of doing this runs a serious risk of having all means tested benefits stopped and enquiries from the HMRC. Social housing stock is not for running a business and is excluded in many tenancy agreements – this is a very very bad thing to mention let alone suggest. Even if you are working and getting support with your rent you run a real risk of finding yourself in real trouble – saying you are creating a business will likely stop your ESA if you are thinking of running a business you could be warned evicted for breach of legal tenancy agree ment I have told the author / owner of this site – about this but she has stated she thinks this should stay on the site. I told ATOS MIRACLES were this lady also post s and they agreed with me that this is a very dangerous track to follow !!! YOU have been warned !!! do this at your peril !!!!

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