Did you know that you can earn up to £4250 per year tax free by renting out your spare room.
The rent a room scheme is available to anyone who rents a furnished room to a lodger in their own home, i.e. the home where you or your family live for most of the time.
Lodgers may have just a room, or they may even have a whole floor if your house is large enough. You still qualify for the rent a room scheme. However, if your home is divided into flats you will be required to declare any rental income as it will fall outside of the rent a room scheme. Unfurnished accommodation is also excluded from the scheme.
You still qualify for the scheme. You do not need to be the owner of the property to take advantage of the rent a room scheme. Tenants should check their tenancy agreement to see if they are allowed to take in paying lodgers.
The £4250 bar is for gross income only, so it is not income less expenses. So you need to work out if it is more profitable to charge a higher rent and declare it as income (you will then be able to deduct reasonable expenses), or to charge a lower rent and so remove the need to declare the income.
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