Mumsnet Talk

We are thinking of renting. We are both self-employed and DP earns a good amount but doesn't pay tax because he is zero-rated. Last time I passed the credit check but DP didn't.

Our options are to pay 6 months rent in advance (not a very good idea in case the landlord gets repossessed) or get a guarantor. We got a guarantor last time (a friend) but they really made him jump through hoops and it was embarrassing. I don't really want to do it again.

Can we not buy some kind of insurance so the landlord is guaranteed his rent?

What country are you in? The reason I ask is that the statement "DP earns a good amount but doesn't pay tax because he is zero-rated" doesn't mean anything in the UK: there is no such thing as zero-rated for income tax.

The landlord/estate agent can insure themselves against non-paying tenants - but the tenants neeed to pass a credit check and meet their criteria.

MrAnchovy we are in the UK - DP is a professional gambler and so has only winnings, which are zero-rated for tax.

I was checking out the landlord insurance - I suppose we could offer to pay the premium, but it sounds a bit weird to offer that.

I'm a landlady too, but even if tenants pass the credit check, you still have no guarantee they'll pay.

Ah I see, gambling winnings are outside the scope of income tax. Even if there is an insurance product available, this would be perceived as high risk so the premiums are unlikely to be economic.

Either a guarantee from someone of good credit standing or a deposit is the way to go I think - I am not sure if the Deposit Protection Scheme would cover this, if not then an escrow account could be arranged with solicitors.

I've had tenants pay up front when they've been self-employed - I can see how this is a potential risk for you (although a relatively low one in terms of repossession) but the risk to a landlord of taking on a tenant whose income is derived from gambling is considerably greater in my view. Not being critical - if it's good enough for Victoria Coren I have no problem with it - but a million and one things could stop him from generating income from this source.

Argh, I get v. defensive over DP's work. He's not gambling on outcome like VC (LOVE her on only connect) more like algorithmic trading. I think the escrow account idea is a good one - the problem tends to be the reaction to the words 'professional gambler' because as here people think it's a very risky business when actually dp's stuff is very low risk.

Last time we did this a friend of mine was our guarantor. he has a very successful company but because he has a business partner they made a huge fuss and he ended up spending days filling out forms and answering their questions. I felt so embarrassed.

Thanks very much to all of you,

I had to look up algorithmic trading and I'm quite surprised it falls under the zero tax bracket, but you learn something new every day!

You still have the same options you had in the opening post I think - cough up 6 months' rent in advance (preferred option for a landlord) or persuade a friend to act as guarantor (clearly a lot of hassle and not really appropriate to your circumstances). Alternatively I suppose you could rent something small enough that your credit check alone is sufficient?

Personally I'd just pay the rent up front, if you can afford it.

Thanks Tribpot. Just for your interest, all DP's earnings are in the form of winnings, but he uses algorithms to achieve them, bots etc. Actually quite a few maths and programming type academics have got into this area. He pays no tax although he pays 40% 'tax' to the provider of the market. We had a hell of a job getting a mortgage and now that sale is falling through we need a 4 bed house within a certain area for school reasons. We can afford to pay the rent up front - I suppose that will be our only option, but it'll be about 36k so it's needs to be done properly. We'll have to see what they offer. It's annoying that his bank say he has nought pence income despite the sums going through his account. i suppose I must resign myself to us always being rather vulgar cash types

Algorithmic trading is not outside the scope of income tax per se, but certain forms (such as spread bet arbitrage) can be because of the nature of the item being traded.

You could get an accountant to draw up and certify accounts for this which might pass a superficial credit check.

Sorry, the first half of that was @tripbot, the second half @mumblesale

I think all winnings are non-taxable, however you win them. He doesn't do spread-betting by the way, he just calculated probabilities and uses his own bots to apply them to the market. So he could bet on a football match, but have no interest in who is playing or who wins, iyswim. The government doesn't care because nearly everyone loses.

He has a perfect credit-rating on experion, but the bank says zero income. I spoke to a letting agent today and she said she would accept bank statements showing income but I don't know how closely she'll look at the source.

Thanks MrAnchovy, i suppose accountants only need to say what is true, rather than the whole truth. I wouldn't like to ask mine though!