Under the government's Rent a Room Scheme you can receive up to £7,500 tax free each year for renting out a furnished room/s in your home. This is just over £144 per week.
Before you rent out a room in your house, you should:
- check with your landlord or with your mortgage lender to make sure they have no objections.
- notify your insurer - you may need to pay an increase in your premium but if you don't tell them your policy could be invalid.
- check that your prospective lodger has the right to rent in the UK.
- contact us if you receive Housing Benefit, to check how your claim will be affected by having a lodger.
- contact us if you receive Housing Benefit, to check how having a lodger will affect your claim
- contact the Department for Work and Pensions (DWP) if you receive Income Support or Jobs Seekers Allowance, to check how having a lodger will affect your claim
- contact our Council Tax team if you live on your own as you won't be eligible for the single person discount
If you are claiming benefits and don’t tell the DWP about your lodger they could prosecute you for fraud.
We may also take action of you are claiming Housing benefit or Council Tax single person discount and don’t tell us about your lodger.