Extra income from a lodger - is it worth it??

headstuckinsand

Ok, so I've got a friend who is coming to stay with me for a couple of months and has agreed to pay me £30pw cash in hand. It'll pay for xmas at least!

Although it got me thinking that in the new year, I may consider getting in a proper lodger as I could potentially get approx £300 a month extra.

My questions however are a) would I need to tell the IP about this and b) would the IP expect all the additional income? If they would then its not worth doing it at all.

Any thoughts?

Thanks

HappyMJ

You can offset expenses against the income and with £30 per week there would be no profit. £300 per month however there may be a little profit.

Charco_2

You should definitely tell your IP if you do decide to do this

It's a nontaxable income under the rent a room scheme but if you're self employed it would still have to be disclosed on your tax return.

If you're PAYE then you wont need a tax return - so it's unlikely anyone would ever know (read between these lines!)

Taking on a lodger will increase your expenses... you'll lose a single persons discounts on your council tax for instance (if you live alone) plus heat and light etc would go up.. you'd need a new I&E.

ONLY HALF THE PROFIT however would go to the IP... the other half of the profit (ie the money AFTER EXPENSES) is yours to keep - certainly worth considering if you are in a position to do so!

(I wouldn't bother to mention to your IP about your friend and the £30 weekly for now though...)

headstuckinsand

Thanks for that. I'll bear it all in mind in the new year.
Cheers:beer: