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  • FIRST POST
    Former MSE Lawrence
    Take in a lodger... official MoneySavingExpert.com discussion
    • #1
    • 16th Oct 07, 5:02 PM
    Take in a lodger... official MoneySavingExpert.com discussion 16th Oct 07 at 5:02 PM
    This is a special discussion as part of the guide to


    The ‘rent a room’ scheme means you can take in a lodger to live in a furnished room in your home, and it has a special exemption meaning you won’t have to pay tax on the first 4,250 you make each year.

    This is a huge tax break for most people and really ups the gain. Better still, as a landlord you’ll be expected to ask for a deposit and a month in advance, which means ready cash comes in quickly.

    How much? You can take home 4, 250 without paying a penny in tax; if you've a desirable property and don't mind paying income tax on anything above this, you could easily add another 1,000.

    Find out more: Read the Govt info on rent a room.

    The "Take a Lodger" Great Hunt

    I want to tap MoneySavers for their tips on finding the perfect lodger, dealing with deposits and being a good landlord. Where should you advertise? What do you need to provide, eg, duvets, food etc?


    Please feel free to add your comments, suggestions or questions

    Just click reply

    This Forum Tip was included in MoneySavingExpert's weekly email

    Don't miss out on new deals, loopholes, and vouchers

    Last edited by Former MSE Andrea; 15-03-2011 at 2:53 PM.
Page 12
  • Lizzie145
    I think the rule about TV licenses is if they have their own locked door then they need their own tv licence (eg unversity halls) if not then yours should cover fine.
  • Matt Hutchinson
    I am planning to rent out a spare room, it's central london, where I can charge 8400 a year (700 a month) for my spare room.

    Since this is 4150 over the allowance, I presume I would only pay TAX on the excess.
    And I would NOT pay TAX on the whole amount?

    Am I correct in thinking that if I do charge 8400 a year, I would pay 1660 in tax.
    (btw, I Pay 40% Tax)

    Therefore pocketing 6740.

    Is this correct?
    Originally posted by 492800
    Hi

    You'll only pay tax on the amount you earn over the 4,250 Rent a Room figure. What tax you pay on that amount depends on all your other earnings - it could be (although unlikely) that the rent you earn pushes your income into the next tax bracket up from the one you're in.

    Cheers

    Matt
    • 492800
    • By 492800 28th Aug 12, 10:55 AM
    • 130 Posts
    • 97 Thanks
    492800
    Thank you Matt.

    Would you or anyone also know if the "rent a room" scheme is the best way regarding TAX? or are there any other options to make the TAX bill "lighter" :-)
    --- Hitting the thanks button as often as is needed ---
    • LyndaP
    • By LyndaP 30th Oct 12, 12:37 PM
    • 74 Posts
    • 50 Thanks
    LyndaP
    I have students stay and earn over 4250. I understand that I will need to pay tax on it but can I claim 10% for wear and tear. It looks like it from my tax return.
    thanks.
  • Matt Hutchinson
    If you use the Rent a Room Scheme you can't claim anything for wear and tear. To do that you'll need to declare the income separately as income from lettings. You'll be able to claim for expenses etc if that's the case.

    Most people don't do this for the income they earn from taking in lodgers as it's usually simpler just to declare the amount over the threshold and be taxed on it. It also makes the tax return simpler (you're just declaring the extra income, not listing expenses and so on).


    Matt
    • Angel_Rachie
    • By Angel_Rachie 5th Sep 13, 1:38 PM
    • 161 Posts
    • 399 Thanks
    Angel_Rachie
    hi I am currently on ESA and live in a privately rented house. Just wondering if I need to inform my landlord if I get a lodger and if it would effect my benefits? TIA
    No More Buying Books: read 0/25; Bought: 0
    May Make 5 a Day Challenge 003.21/150.00
    • seabright
    • By seabright 8th Sep 13, 2:30 PM
    • 621 Posts
    • 1,662 Thanks
    seabright
    hi I am currently on ESA and live in a privately rented house. Just wondering if I need to inform my landlord if I get a lodger and if it would effect my benefits? TIA
    Originally posted by Angel_Rachie
    What does your tenancy agreement say? Check that first. I don't know what ESA is, but I would check with the CAB regarding benefits
  • echo23
    Hi

    Would be grateful for any advice from others on an issue i have encountered with local Council.

    Despite what I've read re entitlement on various rent a room guidance websites, my local council is refusing to allow me to retain my 25% single occupancy council tax discount even though I will only be letting room to a Mon to Fri lodger who works locally but who will be paying own full council tax on his family home which he returns to at weekends.

    Can they do this? Aren't all councils consistent in allowing this and can I appeal this with Valuation Tribunal?

    Any advice appreciated.
    Thanks
    • March2012
    • By March2012 29th Jun 15, 2:13 PM
    • 486 Posts
    • 16 Thanks
    March2012
    lodger might be moving in ...should i ask extra
    for council tax? thanks for any input as i did not think at the beginning that it might actually cost us more to have someone in. thanks for any help!
    • 19lottie82
    • By 19lottie82 29th Jun 15, 2:24 PM
    • 5,814 Posts
    • 8,716 Thanks
    19lottie82
    For a lodger, your weekly / monthly rate should incorporate all bills anyway.

    But in regards to the lodger costing you more in council tax, if you are by yourself just now and get a single persons discount of 25%, if someone else moves in you will lose that (unless the lodger has another "main" address, where they pay CT and is just using your place as digs for work ). Maybe something to think about.
    • shellstar
    • By shellstar 1st Apr 16, 1:08 PM
    • 100 Posts
    • 125 Thanks
    shellstar
    Lodger Agreement
    Hello,

    Can anybody recommend a lodger agreement template at all? I've been considering renting out my spare room. A friend of a friend has expressed some interest and suggested we have a lodger agreement, which seems sensible. I'm aware that lodgers have less rights than tenants but it seems fair to set out the terms of use, rent to be paid etc.

    Many thanks
    Shelley
    • pogofish
    • By pogofish 1st Apr 16, 4:32 PM
    • 9,474 Posts
    • 9,985 Thanks
    pogofish
    You might do better by asking in the house buying and renting forum.
    • Azzzaa
    • By Azzzaa 1st Apr 16, 7:44 PM
    • 341 Posts
    • 2,171 Thanks
    Azzzaa
    I'm sure there must be a section for that on this forum somewhere and congrats on thinking about renting your room, there are so many rooms out there unused which could be beneficial for someone. It's something I push for when i talk to people who need money, it benefits both the renter and person who needs a room
    • mateypeeps
    • By mateypeeps 7th Oct 16, 10:08 AM
    • 155 Posts
    • 359 Thanks
    mateypeeps
    Update this article from 4250 pounds to 7500 pounds
    2. The Rent a Room Scheme
    The Rent a Room Scheme lets you earn up to a threshold of 7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

    You can let out a room or an entire floor.
    • Ddddlodger
    • By Ddddlodger 29th Sep 18, 3:12 PM
    • 1 Posts
    • 0 Thanks
    Ddddlodger
    Landlord lodger question
    Hi. My rent out a small room in my flat. Icharge a small amount Inn recognition. Of this. The lodger wombats to buy a desk and put it in the living room. I won't own of use the desk. Also this would mean me having to take out something of mine s from the living room. I'm Unsure what to do? Am I ok to Ask for more rent if the lodger will technically have more use of the property than originally agreed.
    • mikep22
    • By mikep22 29th Sep 18, 3:46 PM
    • 1,129 Posts
    • 1,379 Thanks
    mikep22
    Hi. My rent out a small room in my flat. Icharge a small amount Inn recognition. Of this. The lodger wombats to buy a desk and put it in the living room. I won't own of use the desk. Also this would mean me having to take out something of mine s from the living room. I'm Unsure what to do? Am I ok to Ask for more rent if the lodger will technically have more use of the property than originally agreed.
    Originally posted by Ddddlodger
    I think in English you are asking..your lodger wants a desk in your living room?

    Surely that is dependant on the terms of the tenancy agreement? Do you allow them to use the rest of the house? But I cant imagine they can buy something to put in the non rented area and claim it as theirs.

    I do not think raising the rent is the way to go, to be honest, if the lodger already has use of this area then they do not have more use of the property. I do think you would be within your rights to say anything which goes in a shared area should be shared, mind.
    Debt: May 15: 17335 Jul 16: 13874 Jan 17: 11,606 Dec 18: 8,308
    • Honeylife
    • By Honeylife 29th Sep 18, 9:50 PM
    • 190 Posts
    • 243 Thanks
    Honeylife
    No certainly not!
    Hi. My rent out a small room in my flat. I charge a small amount Inn recognition. Of this. The lodger wombats to buy a desk and put it in the living room. I won't own of use the desk. Also this would mean me having to take out something of mine s from the living room. I'm Unsure what to do? Am I ok to Ask for more rent if the lodger will technically have more use of the property than originally agreed.
    Originally posted by Ddddlodger
    You are renting a room in your house so you are a Resident Landlord with a lodger. You haven't said if you have a written Agreement and if you have some kind of House Rules.

    My personal advice is that if the lodger wants a desk it must be put in his rented room, not the living room as that is actually not part of the shared/rented area. If you allow him casual use of the living room you should not be permitting him to bring furniture of any sort into that room. You should never remove any of your own personal furniture to accommodate a lodger after the lodger has arrived. They agreed to the room and furniture therein on arrival. You can offer to purchase a desk, a small computer desk if you are limited on space and if you think it could be a good investment for future lodgers. Then it will be yours. But it should be in the Lodger's room.

    I am occasionally asked to take a piece of furniture out and I simply say no. One boy didn't like the coffee table in his room, bought another one and asked me "if there was somewhere he could put the original coffee table". I simply said no! He was cross as he ended up with two coffee tables in his room making it crowded.

    As to asking for more rent - that is out of the question. Absolutely not.
    "... during that time you must never succumb to buying an extra piece of bread for the table or a toy for a child, no." the Pawnbroker 1964
    • DippyHippy86
    • By DippyHippy86 16th Jul 19, 3:29 PM
    • 42 Posts
    • 59 Thanks
    DippyHippy86
    Lodger?
    Hi everyone,

    I was thinking of taking in a lodger in order to get extra money for mortgage overpayments.

    I was wondering if anyone had gone down this route & if there was any advice regarding tax returns, websites etc?

    Thanks

    Em
    Mortgage:
    August 2018 - 121,500
    Goal: Pay off in 8 years
    Term: 25 year / 5 year fix

    GC November - 306.25/300
    • Browntoa
    • By Browntoa 16th Jul 19, 5:26 PM
    • 35,411 Posts
    • 41,503 Thanks
    Browntoa
    Rent a room scheme allows 7500 before you pay tax
    I'm the Board Guide of the Referrers ,Telephones, Pensions , Shop Don't drop ,over 50's , Boost your income and Discount Code boards which means I volunteer to help get your forum questions answered and keep the forum runnning smoothly .However, please remember, board guides don't read every post. If you spot an inappropriate or illegal post please report it to forumteam@moneysavingexpert.com Any views are mine and not the official line of MoneySavingExpert.
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