FTB - Rent a room advice

milliond

Hello, I am shortly moving into my 1st property, its a two bedroom flat.
To help with the mortgage a good friend will be moving in and paying rent.
My question is would I have to pay tax on the rent I receive The flat and bills etc will be shared between us.
I have read a bit about the rent a room scheme but I am not sure if this applies?
The rent will be about £500 a month. Any advice would be appreciated.

Thanks in advance

superfran_uk

Yes, you will, If you re-negotiate the rent a little lower so it's no more than £4250 a year then possibly not:

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804

theartfullodger

There is useful advice on the LLZ site, see
http://www.landlordzone.co.uk/tax/rent-a-room.htm
and
http://www.landlordzone.co.uk/lodgers_rent-a-room.htm

in particular... which will give you some ideas about how to select lodgers...
http://www.landlordzone.co.uk/pdf/Lodger%20Application.pdf

If you don't tell HMRC your are renting out you can assume someone else will...

Cheers!

Lodger

milliond

thanks for the advice. I have some reading to do now:D

Fire_Fox

Do you mean £500 a month rent plus bills or £500 including bills?

milliond

Fire_Fox wrote: »

Do you mean £500 a month rent plus bills or £500 including bills?

Hi. Its £500 a month rent plus bills

superfran_uk

Blimey that's steep!! Even for London! And most definitely too much for a lodger in a flat... Unless the place has a gym, swimming pool, valet parking...

My boyfriend and I currently live outside london in a three bed house and pay £725 a month. In his most recent London flatshare he was paying about £400 before bills and he was a tenant i.e. had rights that lodgers just don't have. I thought lodging was supposed to be the cheap alternative?!

Jowo_2

superfran_uk wrote: »

Blimey that's steep!! Even for London!

£115 per week excluding bills for a relatively nice area of London, big room, close to transport or a few other nice-to-have's assuming they are present doesn't seem that steep to me.

While a figure of £100 pw is common, there's a lot of grotty accommodation out there.

superfran_uk

Jowo wrote: »

£115 per week excluding bills for a relatively nice area of London, big room, close to transport or a few other nice-to-have's assuming they are present doesn't seem that steep to me.

While a figure of £100 pw is common, there's a lot of grotty accommodation out there.

I was updating my post above at the same time, things have obviously changed in the past year or so!

Although I wouldn't live in a flat in london if you paid me that to live there!

Jowo_2

superfran_uk wrote: »

Blimey that's steep!! Even for London! And most definitely too much for a lodger in a flat... Unless the place has a gym, swimming pool, valet parking...

Can't comment on the difference between lodgings and tenancies in terms of prices.

In a few places £115 it might get you an ensuite, otherwise it might get you an average room somewhere nice like Fulham or Clapham and if you get bills factored in, that's great but shouldn't be expected.

Where was the location of the £400 pcm place in London and what were the bills on top?

milliond

hello,

The room is in London, its a double room with an ensuite bathroom, and its also a few minute walk to the train station.
Maybe I need to look at the difference between a tenant and a lodger.
thanks for all the advice