Raise the Roof but watch the arithmetic

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Statistical abuse is not confined to government, advertisers, companies and advertisers. Lobbyists, including lobbyists in good causes, can do it too.

This is apparent in a document sent to parliamentarians by a campaign called Raise the Roof, an offshoot of the flat-sharing website Spareroom.co.uk. 

There is a tax threshold below which you don’t have to declare to the Inland Revenue income from letting out a room. That threshold is currently £4,250 and the campaign wants it raised to £9,000. There has been no change since 1997, they say, and in that time rents have risen significantly.
 
All well and good. But the argument then goes awry.
 
The campaign says that national average income from room rentals is £4,325 a year. This means, it says, that the average person renting out a room is completing a tax return for an income of less than £100 a year.
 
Wrong. First, if the rent is less than £4,250 you don’t have to fill in a self-assessment form to declare it. That eliminates almost half of rented rooms, for which no tax return is required.
 
The average rent for which returns do have to be made is therefore the average of the rest – those renting for more than £4,250 a year - not of the whole rental sector.
 
In any case, the “average” conceals an ambiguity. As used here, it is the mean. But as few rooms are let for nearly nothing, and some rooms for lots and lots, it is likely (though the figures are not readily available) that the mean is greater than the median.
 
If so, it is likely that only a minority of rentals raise more than £4,250, and that the average tax payable on these is far in excess of £100.
 

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