Self-employed can escape the bedroom tax?

by on March 16, 2014

“13 Mar 2014

Earl Attlee: My Lords, as I have indicated, we have put out advice to all social landlords on the need to seriously consider allowing their tenants to set up businesses. There is a misconception among social tenants that they cannot run a business from a council flat. They can, but they need to apply for permission from the landlord. This process is necessary because the landlord needs to be able to accept sensible web-based businesses while not allowing industrial processes to be carried out from the flat.

Lord McKenzie of Luton (Lab): My Lords, should a social landlord acknowledge a room as being available for home-working, would that preclude it being a spare bedroom for the purposes of the bedroom tax?

Earl Attlee: My Lords, the noble Lord has not disappointed me one little bit: I was certain that he would not be able to resist this opportunity. The spare room subsidy encourages people to make full use of their property and to consider running a small business—which I think is highly desirable.”

The extract above from Hansard seems to say, if not clearly, that using a room in your social rented property will stop it being considered a bedroom and remove it from an under occupation calculation.

The tenant will need the permission of the landlord to use the room in this way but the government has encouraged landlords to grant this normally.

Comments

To add a further couple of points.

It’s an interesting issue. The Earl is a DCLG Spokesman rather than DWP but his comment still raises a couple of interesting issues.

The first is an additional facet in the ‘room’s use’ argument. If a tenant – with the landlords knowledge and any other necessary permissions – is using a room solely as a workplace then it isn’t a bedroom. If the landlord knows this then it clearly can’t argue that it’s a bedroom. The landlord may though believe that the work doesn’t require using the room entirely for work. In that case the argument joins the series of appeals at FTT around the usage question and may follow the line of reasoning in the Bolton and Carmarthen UT cases.

More interesting is to consider what happens if that argument loses. If the tenant cannot afford to stay in the property after the ‘bedroom tax’ is applied (remembering that HB is an in-work benefit) then moving to a smaller property becomes necessary.

BUT….

There will not be the room in a smaller property to carry out the self-employment so the bedroom tax has caused the tenant to lose his livelihood. That opens up a range of issues under human rights and equalities legislation.

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