Having a lodger

steffiraf

I'm thinking of renting my spare room to a friend(in a loose term) who is currently on benefits due to losing her job/home. I could do with the extra money and she needs to get out of her current digs(she is currently sharing with 4 truck drivers in a dingy hovel). I understand the hardship it will be for me having lived on my own for 10 years, but i think it will help me pay off my credit card and give her somewhere to feel she is safe and get her back on her feet. She is actively looking for a job and i know she wants her own place again so its not going to be long term thing, but it is likely to be for at least 6 months. My concerns are whether the benefits to me will outweigh the downsides. I realise i will have to declare her to the council so will lose my single occupancy council tax reduction but am unsure as to what else i might lose. I know my utility bills will be more and will be asking her to make up the extra, but am also mindful that she isnt and wont be made of money. Do i need to declare the extra income? Is there anything else i should know before i do this? I should also add that i work full time.
Thanks in advance
Steph

browneyedbazzi

Under the rent a room scheme you can earn up to £4250 in rent from a lodger without paying tax - more information is on the .gov site

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

I know a few people who have lodgers to help with bills and I have been a lodger myself and with the right people it works really well.

Hump

The first £4250 is tax free under the 'rent a room' scheme - she will be able to claim Housing Benefit from your local council for the shared room rate - see https://lha-direct.voa.gov.uk/search.aspx for an indication of how much she will get - you won't need a proper legal agreement, but the council will want a written statement i.e. a letter, outlining the lodging arrangement to enable her to claim

steffiraf

Is that £4250 regardless of your own earnings or is there a threshold for that too? It doesnt say on the gov page that i can see?

Hump

You don't pay tax on the first £4250 you receive - anything over that then you start to have to declare

steffiraf

Thanks very much, you've both been very helpful. Is there anything else i should be wary of that you know about. I've never done this before and aside from the personal hardship of living with someone else am worried about it costing me more than the hassle is worth.

DRP

steffiraf wrote: »

Thanks very much, you've both been very helpful. Is there anything else i should be wary of that you know about. I've never done this before and aside from the personal hardship of living with someone else am worried about it costing me more than the hassle is worth.

I would just make sure you set out the 'rules' for rent, cleaning, notice etc. before she moves in (written?), just so you both know where you stand...

BitterAndTwisted

it's not going to cost you anything extra other than the additional council tax and possible slightly higher bills from having another person doing laundry and bathing IF the heating isn't on all day while you are out at work and she's at home.

One of the things I would suggest is that you make a mental list of all the things that are important to you about the way you live now and how another person under your feet could impact on this. That forms a loose agreement between the two of you. Stuff like a share of he housework, what's shared in the kitchen and what's not, any guests staying overnight. That sort of thing. The more clear you are at the start, the fewer issues you might have to raise later.

steffiraf

Thanks everyone for your advice. She's quite a shy person so i'm not really worried about her bringing all and sundry home and from what i know of her she's fairly reliable. I'm quite fortunate in that i have a woodburner and no bath(only a shower which wont allow more than 10mins in it-dont ask!) so i dont think my utilites will increase dramatically. I suppose i just want someone else to tell me its a good idea!

BitterAndTwisted

Of course it's a good idea. You'll be doing someone a favour, which they are likely never to forget, and you'll be getting extra funds in to cover some of your expenses. Win/win as long as you keep the personal stuff out in the open and discussed if anything arises. AND that she can afford the contributions that you are expecting. JSA doesn't leave you much for any luxuries to speak of. Utility bills could be a stretch if they're quite high.

I've been a lodger and had them in my home as well. It's usually a matter of being clear about things if you're not happy. And fair, of course

G_M

LODGERS (Licencees/Excluded Occupiers)
A lodger (broadly) lives in the same property with their resident landlord, and shares facilities. Unlike tenants, lodgers have few rights.

The Housing Act 1988 (above) provides definitions of 'Resident Landlord' and 'same property'.

There is advice for landlords considering taking in lodgers here:

LodgerLandlord (General information site)

Landlordzone (General advice on taking in lodgers)

Renting out rooms in your home (Government info)

Rent a Room Scheme (Government scheme for tax-free income from lodgers)