Universal credit, rent a room and AirB&B

Spoonie_Turtle

peteuk said:

Autumn2025 said:

Thanks for your response. I have actually asked UC via my journal - I've provided comprehensive legal arguments referencing ADM H5112 (the Teresa example) which states that income from letting a furnished room in a claimant's main home is disregarded unless it's run as a trade like a B&B.

I respectfully disagree that "Airbnb listing suggests a business motive." The legal test under ADM H5112 isn't about the booking platform used, but whether you're actually "conducting a trade." In my case:

• All bookings were monthly stays (not nightly/commercial)
• Income was sporadic with zero income many months
• No meals, cleaning or hotel-type services provided
• Property remained my main residence throughout

The platform neutrality principle is important - ADM H5112 doesn't distinguish between finding guests through direct contact, Spareroom, or Airbnb. The substance of the arrangement matters, not the booking method.

I'm seeking advice from others who've navigated similar situations because this appears to be a gray area where caseworkers may make assumptions about platform use that aren't supported by the actual legal framework.

I would suggest the use of the word “bookings”points to a buisness rather than a lodger (short term) equally can I ask how the room was prepared for the next booking?  I assume youd launder the sheets, tidy the room etc.

I'm not sure that's particularly relevant, surely anyone would do that after any guest leaves and before any guest comes to stay in one's home, regardless of the exact nature of the arrangement?

huckster

Spoonie_Turtle said:

peteuk said:

Autumn2025 said:

Thanks for your response. I have actually asked UC via my journal - I've provided comprehensive legal arguments referencing ADM H5112 (the Teresa example) which states that income from letting a furnished room in a claimant's main home is disregarded unless it's run as a trade like a B&B.

I respectfully disagree that "Airbnb listing suggests a business motive." The legal test under ADM H5112 isn't about the booking platform used, but whether you're actually "conducting a trade." In my case:

• All bookings were monthly stays (not nightly/commercial)
• Income was sporadic with zero income many months
• No meals, cleaning or hotel-type services provided
• Property remained my main residence throughout

The platform neutrality principle is important - ADM H5112 doesn't distinguish between finding guests through direct contact, Spareroom, or Airbnb. The substance of the arrangement matters, not the booking method.

I'm seeking advice from others who've navigated similar situations because this appears to be a gray area where caseworkers may make assumptions about platform use that aren't supported by the actual legal framework.

I would suggest the use of the word “bookings”points to a buisness rather than a lodger (short term) equally can I ask how the room was prepared for the next booking?  I assume youd launder the sheets, tidy the room etc.

I'm not sure that's particularly relevant, surely anyone would do that after any guest leaves and before any guest comes to stay in one's home, regardless of the exact nature of the arrangement?

Disagree, provision of laundry services would point to a business arrangement.

We don't know the exact details. For all we know the OP has  a cottage in the Peak District and can rent spare room out on Airbnb for £600 per week and make well over £20k per year.

NedS

huckster said:

Spoonie_Turtle said:

peteuk said:

Autumn2025 said:

Thanks for your response. I have actually asked UC via my journal - I've provided comprehensive legal arguments referencing ADM H5112 (the Teresa example) which states that income from letting a furnished room in a claimant's main home is disregarded unless it's run as a trade like a B&B.

I respectfully disagree that "Airbnb listing suggests a business motive." The legal test under ADM H5112 isn't about the booking platform used, but whether you're actually "conducting a trade." In my case:

• All bookings were monthly stays (not nightly/commercial)
• Income was sporadic with zero income many months
• No meals, cleaning or hotel-type services provided
• Property remained my main residence throughout

The platform neutrality principle is important - ADM H5112 doesn't distinguish between finding guests through direct contact, Spareroom, or Airbnb. The substance of the arrangement matters, not the booking method.

I'm seeking advice from others who've navigated similar situations because this appears to be a gray area where caseworkers may make assumptions about platform use that aren't supported by the actual legal framework.

I would suggest the use of the word “bookings”points to a buisness rather than a lodger (short term) equally can I ask how the room was prepared for the next booking?  I assume youd launder the sheets, tidy the room etc.

I'm not sure that's particularly relevant, surely anyone would do that after any guest leaves and before any guest comes to stay in one's home, regardless of the exact nature of the arrangement?

Disagree, provision of laundry services would point to a business arrangement.

This is where the length of the let becomes relevant. If it were a short term let (a weekend, or a week) and they laundered the sheets between lets, then that would be indicative of a business.

If it's a long term let (months or years), then one would expect the lodger to launder their own bed linen. If the OP were offering laundry services (hotel like services), then this again would be indicative of a business.

huckster said:

We don't know the exact details. For all we know the OP has  a cottage in the Peak District and can rent spare room out on Airbnb for £600 per week and make well over £20k per year.

and the rental income immediately becomes capital, which being over £16k ends the claim (although that would likely be considered a business anyway).

Spoonie_Turtle

huckster said:

Spoonie_Turtle said:

peteuk said:

Autumn2025 said:

Thanks for your response. I have actually asked UC via my journal - I've provided comprehensive legal arguments referencing ADM H5112 (the Teresa example) which states that income from letting a furnished room in a claimant's main home is disregarded unless it's run as a trade like a B&B.

I respectfully disagree that "Airbnb listing suggests a business motive." The legal test under ADM H5112 isn't about the booking platform used, but whether you're actually "conducting a trade." In my case:

• All bookings were monthly stays (not nightly/commercial)
• Income was sporadic with zero income many months
• No meals, cleaning or hotel-type services provided
• Property remained my main residence throughout

The platform neutrality principle is important - ADM H5112 doesn't distinguish between finding guests through direct contact, Spareroom, or Airbnb. The substance of the arrangement matters, not the booking method.

I'm seeking advice from others who've navigated similar situations because this appears to be a gray area where caseworkers may make assumptions about platform use that aren't supported by the actual legal framework.

I would suggest the use of the word “bookings”points to a buisness rather than a lodger (short term) equally can I ask how the room was prepared for the next booking?  I assume youd launder the sheets, tidy the room etc.

I'm not sure that's particularly relevant, surely anyone would do that after any guest leaves and before any guest comes to stay in one's home, regardless of the exact nature of the arrangement?

Disagree, provision of laundry services would point to a business arrangement.

NedS said:

huckster said:

Spoonie_Turtle said:

peteuk said:

Autumn2025 said:

Thanks for your response. I have actually asked UC via my journal - I've provided comprehensive legal arguments referencing ADM H5112 (the Teresa example) which states that income from letting a furnished room in a claimant's main home is disregarded unless it's run as a trade like a B&B.

I respectfully disagree that "Airbnb listing suggests a business motive." The legal test under ADM H5112 isn't about the booking platform used, but whether you're actually "conducting a trade." In my case:

• All bookings were monthly stays (not nightly/commercial)
• Income was sporadic with zero income many months
• No meals, cleaning or hotel-type services provided
• Property remained my main residence throughout

The platform neutrality principle is important - ADM H5112 doesn't distinguish between finding guests through direct contact, Spareroom, or Airbnb. The substance of the arrangement matters, not the booking method.

I'm seeking advice from others who've navigated similar situations because this appears to be a gray area where caseworkers may make assumptions about platform use that aren't supported by the actual legal framework.

I would suggest the use of the word “bookings”points to a buisness rather than a lodger (short term) equally can I ask how the room was prepared for the next booking?  I assume youd launder the sheets, tidy the room etc.

I'm not sure that's particularly relevant, surely anyone would do that after any guest leaves and before any guest comes to stay in one's home, regardless of the exact nature of the arrangement?

Disagree, provision of laundry services would point to a business arrangement.

This is where the length of the let becomes relevant. If it were a short term let (a weekend, or a week) and they laundered the sheets between lets, then that would be indicative of a business.

If it's a long term let (months or years), then one would expect the lodger to launder their own bed linen. If the OP were offering laundry services (hotel like services), then this again would be indicative of a business.

Sorry this is something I can't get my head around; I cannot imagine turning up ANYwhere with ANY type of arrangement - a friend's house, or as a lodger, or as a holiday tenant - and being told 'oh hey you'll have to wash the sheets first'.  And I would FULLY expect to start out sleeping on clean sheets, not staying with some nasty person who thought it was fine not to wash them between different people using them.

Completely agree the details during the let are salient - you'd expect a lodger to normally do their own laundry (although since the sheets belong to the person whose house it is, there could be a scenario where they insist on washing the sheets when the lodger wants them cleaned because they're particular about the way they're done, but of course you wouldn't expect them to do the rest of the lodger's laundry) and buy their own food etc., as well as the length of the lets and all the other details.

I just cannot imagine there being any situation where somebody would not wash the sheets in between having different guests in their home regardless of the arrangement, apart from if the lodger brings their own sheets (and of course takes them when they leave).

huckster

Generally long term lodgers would provide their own bedding and clean them.  Property owner would just allow lodger access to washing machine.

How many people would take in a lodger and end up doing their laundry?

NedS

Spoonie_Turtle said:

Sorry this is something I can't get my head around; I cannot imagine turning up ANYwhere with ANY type of arrangement - a friend's house, or as a lodger, or as a holiday tenant - and being told 'oh hey you'll have to wash the sheets first'.  And I would FULLY expect to start out sleeping on clean sheets, not staying with some nasty person who thought it was fine not to wash them between different people using them.

Completely agree the details during the let are salient - you'd expect a lodger to normally do their own laundry (although since the sheets belong to the person whose house it is, there could be a scenario where they insist on washing the sheets when the lodger wants them cleaned because they're particular about the way they're done, but of course you wouldn't expect them to do the rest of the lodger's laundry) and buy their own food etc., as well as the length of the lets and all the other details.

I just cannot imagine there being any situation where somebody would not wash the sheets in between having different guests in their home regardless of the arrangement, apart from if the lodger brings their own sheets (and of course takes them when they leave).

In my defence, I don't do the laundry 

Yamor

I disagree with some of the earlier posters.

For Universal Credit, the DWP moved away from the terminology of “business”, which is used in legacy benefits. UC legislation uses the terminology used in tax law of “trade”, which is much narrower than “business”.

There is a very long history of case law in the tax world about when exactly the services included within a “property business” will mean that the business is considered a “trade”, and it is clear that quite a high level of services are required.

A good starting point to read about this is Chapter 3 in this document: https://webarchive.nationalarchives.gov.uk/ukgwa/20140109143644/http://www.hmrc.gov.uk/pbr2009/withdrawing-lettings-rules-3760.pdf

See also the following page, from the section headed “Letting property and providing additional services” and onwards: https://www.gov.uk/hmrc-internal-manuals/property-income-manual/pim4300

So, for example, on the specific example of bed linen, the above links are clear that supplying clean linen at the start of the letting would not be enough to make it a trade, and even the regular supply of clean linen during the letting would normally only be indicative of a separate trade alongside a property business, and would not mean that the entire income is income from a trade.

In my experience, DMs within DWP often still apply the much lower test used under legacy benefits of “business”. This is wrong, and should be appealed if necessary.

Finally, I don’t agree with the general sentiment (expressed in this thread and also in other threads on other issues) that it is a decision to be made by UC and that you are therefore required to report it to them to allow them to make a decision. If you are sure that the income does not count for UC, then you can simply ignore it and not report it.

Of course, it may be advisable to present the facts to DWP in case they discover the income themselves and make an adverse decision, creating a (potentially quite large) overpayment, which you would then have to appeal. But that is for you to decide for yourself. For example, if you are confident in your analysis that it is not a trade, then you may prefer to do nothing now, and only argue it out with UC if and when they discover it, relying on the fact that any overpayment would only be recovered slowly in any event.

huckster

Recipe for future problems in people deciding what they need to report to DWP benefit services.

In general there is a requirement to inform benefits of sources of income. 

peteuk

huckster said:

Recipe for future problems in people deciding what they need to report to DWP benefit services.

In general there is a requirement to inform benefits of sources of income. 

If PAYE then as you know this is automatically reported.  If self employed then you need to report your earnings on the last day of the AP.

Not sure about anything inbetween.  Side hustle, rent received etc

huckster

Exactly other income. Which is why when making a new claim for UC there are questions about forms of other income.