How are single mothers in this situation meant to live.

[pinkbubbleandcandyfloss]

I work full time and earn £40k
I am very lucky and have a tiny flat that I rent out (I have tried to sell but it won't move), because of this I am entitled to zero help from the government. This brings in £1100 but most of it is eaten up with paying the mortgage on it.

My rent alone for a two bedroom place is £1300, gas and elec £250 a month, council tax £140 + mortgage on flat around £700 a month. (This is buy to let interest only)! I then have to pay over £1k on nursery, which I can only do because my parents help me!
In all honesty I feel in such a helpless situation. I try and work freelance in the evening to bring in a little extra money and my ex pays what he has to £350. I work bloody hard and have nothing to show for it.

Sorry not sure of the point of this post, but why are our electricity bills allowed to go up again? It's actually hard to live a modest but nice life in the south east unless you're with a partner and earn mega bucks!

It feels if you live in the South East, as a single, working parent you need to be on at least £80k to live.

I'm as lefty as they come but I agree. Other than your ex's disgraceful behaviour, you're experiencing a short/medium term struggle, but your prospects are good.

I'd bring back sure start though and pursue idle men to the ends of the earth.

If you're not a higher-rate taxpayer you are doing something wrong. The Section 24 tax credit is 20% meaning you pay 20% in tax and then get it back in the form of a credit. It should make no difference to you at all - it was designed to penalise higher rate taxpayers.

What are you referring to? The S24 credit still exists although could be abolished by Labour in the budget.

Anything will sell if the price is right - that's the basic law of how a market operates. Unless it's got serious structural problems, but even then, at a price commensurate with the condition of the property, someone will be willing to buy it.

It sounds like OP doesn't want to reduce the price to a level at which a buyer wants to buy it.

You can no longer offset mortgage interest against the rental income is what I am referring to.

The rules are made to fit the majority of cases and most landlords are not struggling financially. You are in an unusual situation, paying rent whilst renting out another property. You need to focus on changing your situation.

You would be best to focus on selling the flat. You can reduce the price so it sells quickly. It's possible to sell with a tenant living there if you really can't afford to leave it empty, although you will get less for it.

Tax rules support owner occupiers, I would focus on selling the flat asap and buying somewhere you can live.

Another vote for re-thinking the rental flat situation here…
If your salary is £40k, and you have rental income of £1.1k a month (ie £13200 Pa), that makes your earnings over the threshold for higher rate tax (40 percent).
I am not sure what fees you are offsetting from the rental income (service charge / property management fees etc), but adding in your freelance earnings will also keep it above 40 per cent tax band.

So that means you are paying 40 per cent tax on your rental income (with only a 20 per cent relief on your interest payments), so worst case scenario you could be paying towards £3000+ tax, and £8400 mortgage interest a year, which doesn’t leave you much of the rental income at all…especially if you are also paying out a service charge, and estate agents management fees - you might actually be subsidising it rather than making any money at all from it… definitely worth sitting down with all the figures and working out the bottom line. I am not a tax adviser btw.

In that case it needs to be sold - if it didnt sell when you tried, are you pricing it too high?

You need to work out a way to get the flat sold

They are a higher rate tax payer if they earn £40k plus £1100 a month rental. I make that £53200 so they wouldn't get tax relief on all of the mortgage interest but most of it.

@Spirallingdownwards that's true but you can claim a 20% tax credit which neutralises the impact for 20% tax payers

Quoting myself as I couldn’t edit - tax situation prob not as above, as I think you would only pay 40 per cent on income above the tax threshold, not necessarily the whole rental income, but I think it still deserves looking into in detail, and maybe taking some advice..

@Bluemonkey2029 not if there are other deductible expenses that can be claimed.

In reality the additional tax due will be minimal

Is the flat really unsaleable, or temporarilly so?
Join one of the landlords websites - you may find that a professional landlord would buy from you, or go to one of the letting agencies, and ask for their sales advice re selling to another landlord.
If you do sell, can you buy at the same time? A mortgage may cost less than rent.

This

But their income from the rental isn’t £1100 a month because all expenses would be taken off this. I was assuming the mortgage payments would be quite substantial and she’d be making very little profit.

It’s only if you earn less than £12,500…so wouldn’t be you, OP.

From the looks of it not many people actually understand the married couples allowance.

The eligibility are an or selection so,

Married
Or
Civil partnership
Or born before 1935

I claimed it a few years back when I was married and I was born in 1989 🤷‍♀️

I’m pretty sure it’s for those born after April 1935…

You can claim Married Couple’s Allowance if one of the couple were born before 6 April 1935.

There is no age restriction for a claim for Marriage Allowance which allows a lower earner to transfer some of their personal tax free allowance to their spouse or civil partner.

1k nursery for a 3 year old??How come you don't claim 30 hours free childcare?

I bet she does—the £1k is probably a top-up.

That's very, very low.

If you can show you're trying to sell the flat then universal credit can disregard the value of the flat. Would this mean you'd be able to get some help?

Fuck all due to interest rates, I’d be surprised if it hasn’t fallen in value.