Rent a room scheme

Boost your income by letting a room in your home

If you are a homeowner, a council tenant or renting privately and have a furnished spare room you could earn some additional income. In our current harsh economic times this could make a real difference for you in meeting your housing costs and bills. Under the Rent a Room Scheme you could receive up to £4,250 (£2,125 if joint owners or tenants) tax free or an additional £354.00 per month.

...or maybe you are looking for accommodation to rent?

All you need is a spare furnished room in your family home that you could rent out to a lodger. A lodger is someone who pays to live in your home – they could be a friend or a work colleague or come recommended. They could live there from Monday to Friday so you have the weekends or it could be just a room for the whole week – the choice is yours. It’s a very simple way of earning extra income tax free.

The room you let out must be in your main home where you live with access to cooking facilities and use of the bathroom must be shared. If you have a mortgage it would be a good idea to check with your lender and insurer first that it is within their terms and conditions. For those of you renting your home from a social landlord you should notify them in writing. For those renting privately you will need to ask your landlord for permission.

Renting to a lodger can be flexible – it would be up to you on how long they stay.

The additional income may allow you to stay in your property rather than having to move.

If you are receiving benefits you must notify your local housing benefit office and the Job Centre Plus of the increase in your income. The additional income may mean your benefit reduces but you are still better off with the additional income overall.

If you don't normally receive a tax return and the additional income is below the tax-free thresholds for the scheme, the tax exemption is automatic so you don't need to do anything.
Of course if you don’t have to use the Rent a Room Scheme. Any income that you earn over the threshold of £4,250 must be declared to the tax office. For further information on tax related issues please visit HM Customs and Revenue or for more detailed information about the Rent a Room scheme please visit Direct.gov.