Taking In Lodgers- ‘Rent-A-Room’ Scheme

Ever considered taking in a lodger? A lodger can be a great way of generating income; many thousands of people earn extra income in this way.

To start with, I’m going to list a few of the perks and pitfalls for accommodating lodgers:

The positives of taking in a lodger

• most obviously, it’s a great way of earning extra cash, which can ultimately help you pay your mortgage and support other financial expenditures you may have
• The Inland Revenue allow you to earn up to £4250 per year (Just over £350 per month) tax-free through the rent-a-room scheme. To be valid for the scheme (tax-free policy), you need to stick to a few rules, which I’ll cover later.
• Your lodger has a license to occupy your premises and not a full tenancy – no interest in the property – therefore it’s a much simpler process to remove unsuitable lodgers than it is tenants You have much more control over the situation with a lodger than you do with full tenants. This is because Lodgers occupy your home on licence, and they do not have security of tenure – unlike tenants. Lodgers cannot call the place their own, therefore they have no right to stay on if you give them notice to leave.
• If you live alone, a lodger’s presence alone can provide you with security
• Good lodgers can become great friends; they can even become free house sitters, child and pet minders. Let’s face it, living with someone new and random could be fun; you may find yourself with a new drinking partner

The negatives of taking in a lodger

• you could potentially end up living with a stranger. So it’s important you get someone trust worthy in. It’s always best if you can get a friend in, or a friend-of-a-friend; basically anyone that comes with a good recommendation from someone you can trust.
• you’ll have to provide a communal area, such as a bathroom and kitchen.
• you may find it more difficult to gain personal space and “alone time” around the house. So walking around in your undies or cooking naked may no longer be an option. Unless, of course, by some miracle you’re both nudists! In that case, game on.
• Lodgers and landlords aren’t always going to agree on everything, so the odd debate here and there is more than possible.
• Your tenant has the right to invite guests over, so you may have to play host for random guests and have unknown faces around your house.

The Rent a Room scheme

The main benefit of getting a lodger is that you can apply for the “rent a room scheme”, which as mentioned, entitles you to a tax free income of up to £4250. The Rent a Room scheme is an optional exemption scheme from renting furnished accommodation in your only or main home.

To avoid creating full tenancies and to qualify for the rent-a-room scheme, you must meet the following requirements:

• The room you let must be in your main residence, where you live most of the year. If you move out the lodger could become a full tenant by default.
• The lodger must not have exclusive possession of a self-contained part of your property. Cooking facilities and bathroom etc. need to be shared with you.
• The room you let must be for the lodger to live in, not to run a business.
• If you are a tenant yourself you will need permission from your own landlord before you take a lodger. You will need permission in writing.
• You will need to inform your insurers – they may want to change the cover slightly, and it’s a good idea to ask the lodger to insure their own possessions. It’s unlikely your household insurance will cover the lodger’s possessions.
• You need to inform your mortgage lender, though it’s unlikely they will have any objections.

The advantages and disadvantages of the scheme

Although the scheme sounds like a decent deal, it might not be for you; it’s simply a matter of working out what is best for you. The principal point to bear in mind is that if you are in the Rent a Room scheme you can’t claim any expenses relating to the letting, for example, wear and tear, insurance, repairs, heating and lighting.

To work out whether you will be better off joining the scheme or declaring all of your letting income and claiming expenses on your tax return you need to compare the following:

• how much income you are left with after your expenses
• the amount of your receipts (rent plus any income from laundry services, meals, etc) over £4,250 or £2,125 if letting jointly (2007-2008 tax year)
• If you opt out of the scheme (or simply do nothing) you will pay income tax on the first amount. If you opt into the scheme you will pay tax on the second amount.

Extra “rent a room scheme” notes

• You will not need to worry about health and safety, environmental health and gas checks, as you would with a full tenant. However, it never hurts to make take those precautions regardless.
• As mentioned, you’re taking a huge risk when taking in a stranger as a lodger. We all tend to be too trusting of people we don’t know – letting a complete stranger into your home is a risk.
• It is most advisable to verify the lodger thoroughly. You should carry out credit searches and referencing on prospective lodgers, just as you would a tenant – unless you know they are genuine or they come recommended from a reliable source.
• Legally you don’t need a formal agreement, but it is an extremely good idea to have one, as it can prevent a lot of arguments later.
• Renting out a room may also affect your contents insurance. Most insurers will put up premiums, but it’s still important to inform them if you want to be sure that your belongings are protected. If you don’t tell them, the insurance may not be valid.
• Taking in a lodger will most likely affect the amount of benefits you get if you’re claiming. For example, if you’re receiving housing benefit and you take in a lodger, the amount you get will almost certainly be reduced as they’ll assume your lodger is paying rent. This will be the case even if your lodger is living rent-free. If you simply don’t tell them, you may end up having to repay an overpayment, or be prosecuted for fraud.

Have you ever been a lodger or taken in a lodger or even simply considered taken in a lodger? Tell me about it…

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113 Comments - join the conversation...

Showing 64 - 113 comments (out of 113)

sandra2010-09-07 07:48:10 Ok so we are purchasing a home for our son to live in whil at Uni on a dependents mortgage. (with a lot of financial helpfrom family!)

If he then wants to rent rooms to two friends are we likely to have any issues with mortgage provider. They are aware he will be main resident not us.
Insurance seems a nightmare - even if just him there as he not owner and is a student !
Thanks 64

Anna Mc2010-10-04 21:04:09 Hi, I'm trying to get some advice about whether it would be better for both me and the person I am considering renting from to be a lodger (rent a room scheme) or a tenant. I am self employed but I am on a very low income, so I currently receive housing benefit and council tax benefit. (as a tenant) I have been looking to move to a different area as it would increase my opportunity for work, and a house has come up via a friend of one of my relatives - basically he works away from home alot, so most of the time I would be in the house on my own, so wants someone in his home that he trusts. He is fine about my being on benefits - but I'm not sure if I would get the amount I currently receive for my tenancy at my current address - which is lower than the price he is asking as a lodger (all bills included in this higher amount). He would however be prepared to allow me to take the property on as a tenant, at the rental price I currently pay, provided I then pay all the bills. He would still wish to return to the hose on occasion, which I'm perfectly happy about.
any advice would be greatly appreciated:) 65

Nicola2010-10-16 17:59:18 Hi, last month I took in a lodger within the rent a room scheme, do I have to register anywhere?

This lodger today informed me she is moving out after her first months rent is up on Monday. She is demanding her 500 pounds deposit back and have had loads of grief from different members of her family int he last 4 hours which has been very stressful.

We never had a written agreement as I was advised they were not worth the paper written on as she is not a tenent but in hind sight should have had something on paper.

As far as I am concerned, the verbal agreed terms where,
Her minimum lease was until Christmas
the deposit was 6 weeks rent, and one months rent up front
4 weeks encase she didn't give any notice
2 weeks for damage or problems

Do I have to give her anything back as she is now demanding all of it. 66

Elizabeth Hill2010-12-12 23:57:14 can you tell me how I register on the rent a room scheme and could you please send through the forms for me to fill in


Regards Elizabeth hill 67

Weiyen2011-01-10 13:37:00 I have got a nightmare lodger living with me who I'm trying to evict. She behaves as though the flat is her own property and that I am the lodger. She doesn't abide by any of the flatrules including cleaning, not smoking in the flat, fiddling with my boiler, having her b/f stay without asking, along with shouting and swearing at me. I have come to the end of my tether but to make matters worse, the contract I got her to sign was a tenancy contract (this was done in error) and that has therefore given her far more rights, than a lodger should have. Her boyfriend threatened to sue me when I gave her 3 weeks notice to move out. Is there anything I can do since she's signed the tenancy agreement? She also hasn't paid for the full month and when i asked her to make this payment, she said she would only pay the outstanding amount if I immediately refund her deposit! I have of course not agreed to this, but I'm very concerned that I am going to be out of pocket due to the rent and bills she owes me. Any advice will be greatly appreciated! Thanks 68

Ben2011-04-18 07:19:20 We are currently looking for a lodger and originally said no DSS.

A person claiming DSS has recently shown interest and although it feels she would be a 'safe option' we have some concerns:

We didn't want someone sitting around in the house all day - especially in winter when this would really put the bills up.

We are also concerned with how quickly we would receive the Housing Benefit and therefore for some months, she could be living here rent free.

Finally, she has a mild disability - if the house share didn't work out and we wanted her to leave, would we be bound by law to continue providing accommodation because of this disability?

Thanks for your advice.

Ben 69

Natz_Glesga2011-04-24 02:16:00 Hi,

I have a lodger staying with me, she is one of my friends who I previously worked with and have known for around 5 years. The problem is that she has random guys round all the time, they arrive at around 2am, make a noise coming in etc and then use my shower etc in the morning. I wouldn't mind if she introduced them or told us that they were coming round and staying the night in advance. when these guys are round i feel like i can't even use my own home even though i own the flat!! The main reason I am so bothered about this is that the flat was broken into 4 months ago and I don't feel comfortable having strangers in my home.

This may sound stupid and like I am over reacting but its really pissing me off!! Oh and I forgot to mention that she usually has 3 showers a day and the last shower of the day is usually at 2 or 3 am even though she has been in all day!

No tenanacy agreement or anything signed, she pays me £280 a month for the use of the room, kitchen, bathroom etc, however, i dont think that the amount of showers etc is reasonable and i did say if she was having people over to let me know out of consideration as myself and my boyfriend work shifts.

Any help or advice on how I can get rid of her would be greatly appreciated. A couple of my mates have volunteered to throw her out but i think that this is a bit extreme!!

Thanks

N 70

cardifflandlord2011-04-25 17:11:33 Just ask her to leave!

She does not have a tenancy agreement (She can't have one as you are a live in landlord - you have to issue a licence)so she has no resort to the courts.

Explain to her why you want her to go and just give her a date to be out by.

Man up and do the deed - it's your house.

Simple.

Cardifflandlord. 71

Joe Peddos2011-04-25 20:02:04 I don't think you have any other option but to ask her to leave. You may find it very hard. At the end of the day its your house and you have the right to set rules of behavior you expect from a lodger. Why not write a list of house rules and give your lodger the choice either abide by them or move out. Make sure you get the house key back if she moves out and as a precaution change the locks after she has gone. I don't know where you live but if its in a big city you could possibly take in a student if you need the money. We did this for nearly 30 yrs doing homestay (under the rent a room scheme) for a private English language school on a short term basis anything from 2 weeks up to 6 months the big advantage is the school pays you and if you have problems the school would help resolve them or move them out. The down side is they don't guarantee how many students you get so the income can be a bit patchy. We had our share of awkward students and the ones that moaned and groaned we told them "no one is forcing you to stay". I worked with a guy who, to help a friend out,rented him a room in his house. He got so behind with his rent he had to ask him to leave as he was just getting excuse after excuse as to why he could not pay him. Hope things work out OK Joe 72

Chung Wright2011-05-29 01:13:30 Had a ex lodger who is now trying to sue me after breaking the shower screen, back in feb, There house share agreement had already finished, i would just like some advise as to were i stand
Many thanks
Chung 73

nicola2011-09-18 15:02:11 I am a single mum on working tax credits and child tax credits and it has been suggested to me through a few friends to rent out a room to help me make ends meet, do I need to ask hmrc for permission to do this as l do not want it to affect any help that I already receive. I currently work part time 26 hours a week. 74

Mark2011-09-20 11:56:22 The requirements for rent a room scheme include the need to provide communal facilities, such as a kitchen and bathroom. Where are these requirements officially referenced? The treason i ask is that our primary residence includes a self containd section at one end, with a separate front door, kitchen, bathroom, lounge and bedroom, but a dividing door to the main house (effectively an annex). We do not have planning permission to rent this space, but HMRC has indicated that we would qualify for rent a room relief. We want to maintain our privacy and minimise the sharing of facilities in the main house / annex, but at the same time qualify for the scheme and be completely above board in terms of planning requirements. Is this feasible? 75

Colin2011-09-27 10:26:20 We have taken the plunge with two lodgers. Insurance no problem with HomeProtect but yesterday was advised by BT that our broadband account usage (in five days) had soared from 23gb to 98gb! at £5 per gb premium this was serious. In fact 75gb at £5 per gb premium. Be warned if you do not have a unlimited data allowance. 76

Matthew2011-09-28 10:06:26 Hi. The guidelines on this website state that a lodger can not have exclusive use of a self contained area e.g. bathroom /kitchen. Where are the 'official rules' for the rent a room scheme detailed? The reason I ask is that our property has a self contained and connecting 'annex' at one end, which we want to generate income from as we rarely use it, but we want to minimise the impact on our privacy. I would like some additional guidance on how we would need to set up the lodger arrangement to ensure we do not have planning issues down the track. Would we need to demonstrate that we share part of the space with the lodger, for example a room or kitchen? 77

Soledas2011-11-25 10:45:17 Hello,
I am a lodger and have a single room with private bathroom as a self-contained flat. I share other facilities.
Am I still a lodger? I am not allowed to lock my room but few times I noted that perosnal belongings were moved. Lanldord never ask if I need the heating on and being a house the temperature becomes really low. They said everything is included but I get the heating 1 hour in the evening only. They didn't give me a contract as they said they do not want to declare the rent I pay as it is high for the area. They now want to do repairs - for issues they had before but they didn't tell me - and taking out all the tiles in my bathroom and cannot use facilities for few days. The strange thing is they aksed me to leave till they finish but still will have to pay my rent. I have nowhere to go or I would just leave the house. What do I need to do in this case? 78

Don2012-01-05 18:22:21 Hi, my girlfriend lives in a landlord owned flat but gets her rent paid by the government as she is on sickness benefit. If she gives the flat up to move in with me, can I treat her as a lodger and thus claim the lodgers rent of £4250? Thanks. Don 79

Jeremy2012-01-05 22:54:31 You can try, Don, but I'd guess it's called benefit fraud. This is a landlord website, not a social security area so maybe you'd get a better quality of answer in a different place. However from bit I know of benefits:

The sickness benefit elagibility triggers payments of Housing Benefit (the £4,250 you fancy having).

Sickness benefit will be measured on a number of criteria, I'd guess including what amount of partner / family help is provided to the claimant.

If you pass yourself off as her new Rigsby instead of her new live-in boyfriend and if that is a material fact to sickness benefit asssesment and / or housing benefit then you have committed a crime.

But if you do try it on and get away with it, can you please pay me back my share of my tax money you've stolen. Thanks. 80

Don2012-01-06 15:20:07 Thanks Jeremy for taking the time to answer my question: I obviously do not wish to commit a fraud. But to use a hypothetical point: I wonder, if a man rents a room out to a female lodger and they later become more involved, at what point are they guilty of fraud and carried off to prison? On your second point: Would you like me to send you the tax money now, since, if my girlfriend was to move in with me and pay me the money instead of paying it to her landlord (who is lying up in the Bahamas, drinking her, sorry, I mean your tax money) it could be me and her lying up in the Bahamas ! So, the bottom line is....whatever way one looks at it, the state does not lose out and I'm sorry to say you will not get a tax reimbursement. 81

Jeremy2012-01-06 23:26:04 Hello Don: Thanks for replying, so many people don't bother.

I think you've answered your first question. I think it's the point that they "join" to become one family unit rather than two people units (which is how benefit law sees things) where a fraud possibly starts to be comitted.

The second point revolves around the same idea. I think that ever since the eighties we've been encouraged to think of ourselves as a collection of individuals, rather than as members of families or membrs of society. And the nineties taght us to think of our individual entitlements and rights.

But benefit law is still based around earlier perceptions of people as being within families. It must act as the ~final~ safety net to prevent people becoming destitute.

So if a person living on their own could not cope, then the state steps in. But if that person has a partner who can support them then that person gets nothing / not as much.

It's similar to unemployment benefit. Lose a job and no savings = benefits. Lose a job and savings = no benefits until you spend all your savings away.

So IF (and it's a big if because it's a moral point to which there's no absolute answer) one views society using the basic building block unit as the family (benefits law view), rather than the person (contempory view): It's possible to say society would be defrauded should you act as her landlord-boyfriend because you should do things for free (like let her live with you) to support her which the state would only do when she does not have a loving partner who takes care of her.

If there was no Social Security benefit, would you charge the person you love four grand a year to live with you? If the answer is no, then the system is getting milked. 82

Soley2012-01-07 02:42:43 @Jeremy

Love the reply. Awesome. People dont care for their dignity anymore. Everyone has a hand out demanding a free ride with no shame at all. 83

Jeremy2012-01-07 10:16:11 Thanks for your kind words, Soley.

Don might be in a position where money is so desperately tight that he feels compelled to do this, regardless of any moral stance. Sometimes it's hard to do the right thing if you're desperate! We just don't know that part of Don's story. But I hope he does not. Not just because it's not really the right thing, but also there's a good chance he'll get caught. Then whatever problems he's got to contend with right now will get loads worse. 84

sue2012-01-15 14:36:34 i took in a lodger last year, a young lady who fled home to domestic violence. she claims income support and housing benefit to pay her rent. since christmas she has been back in touch with her family and stayed there most of the time with a view to moving back with them. i dont want to put her under any pressure to leave my property as i want her to be sure she has made the right choice. she still has the key to my house and told me it is still her home, also she s free to come and go as before. By law am i still entitled to the housing benefit i receive (which is currently suspended as she did some seasonal work at christmas). i dont want to break any rules and this situation is bothering me quite a bit! 85

Phil2012-01-22 09:25:44 Im thinking about taking on a lodger but I'm a bit concerned about the following:
1) what happens if they run up huge utility bills and leave before they are produced?
2) are we allowed to place there names on the utility bills?
Look forward in hearing any advice 86

Carol2012-01-23 15:27:27 my son moved in with me some years ago and helps me to pay my morgage he has recently become unemployed, signed on Monday 16th Jan 12, not had any allowance yet
but indications are that because we are mother and son he won't get any help 87

matt2012-01-28 20:31:04 hi im currently sofa hopping and on dss...i recently spoke to a bloke who has just been made redundant but owns a big house with a bedroom and en suite shower downstairs....he has had to make a claim for benefits his self for now (prob wont be long term as he is very qualified)buthe has a family with two kids to claim for.....i told him i am on dss but currently have nowhere to live permanent he has said if i can get housing benefit he would be prepared to let me rent the downstairs room and ensuite...my question is 1..would this affect his benefits and 2.would i be eligible to claim housing benefit for this service...thanks any replies would be appreciated.... 88

matt2012-01-28 20:41:24 my 2nd question is that i am signing on but sofa hopping and want to rent a flat, but i dont have deposits or rent in advance.also a few agencies i have asked,have asked for credit checks to be done or a gaurantor how can i get over this problem or what can i do about it??....im not sure if i wud pass a credit check and i cannot get a guarantor so i feel stuck sofa hopping please help...i am by the way in a new town and am currently searching franticly for a job with a few leads on the horizon but till then i really need to sort out how i can rent on dss until the happy job day comes thanks all... 89

frediewins2012-01-28 21:35:59 Hi there,

I'm retired and live in Florida, USA. I was born in England and have live in the US for many years. Now I would LOVE to spend summers in England and my winters back here in Florida. Finding this article about the rent-a-room scheme, well, perhaps I have found a way to do it--wondering if this will suit what I want to do. I am still a British subject (dual citizenship, actually), I'm a 67 year old female. Kindly advise. Many thanks, Fredie 90

Jeremy2012-02-01 22:00:46 Hello Matt,

Seeing how no-one else has answered you, I'll try, but I'm not a world-authority on DSS.

Your circumstances make me think you'd be eligable for Local Housing Allocance because you're a job seeker and get it because you've qualified for Jobseeker's allowance.

As long as your contact offers you a proper tenancy and has a real landlord relationship with you (i.e. he's not a mate who'd be willing to put you up for free, but fancies seeing if he can get his hands on some handout money) then you can claim, probably successfully.

The LHA which you pay this bloke then becomes his income and he would need to delcare it as part of his submission for benefits.

Potentially (and I don't know the rules) this could reduce or remove any benefits he is entitled to. 91

matt2012-02-02 13:44:00 hi thanx jeremy looks like i may have to go with normal private renting due to the affect it will have if he claims too so thanx again for your reply and hopefully i will be ok now thanx from matt 92

paddy2012-02-24 17:53:00 hi
i rent a private 2 bedroom flat and im alone.my friend lives alone in a 3 bedroom house witch is 2 big as she lives alone as.we r just friends can she give up her house and share my flat as friends.and will she have to pay rent or do i have to pay for it.or do we pay double rent.
regards
paddy 93

Jeremy2012-02-25 13:50:09 Hello paddy. Ask your landlord. Jeremy. 94

ahmed2012-05-09 00:10:27 Hi I have two bedrooms flat on my name with wife and my daughter have one spar room and want to give a lodger for extra money. I am currently fulltime working and don't get any benefit apart from child tax credit and child benefit. So my question is if I tell my council I am taking a lodger there for will my House rent and council tax gone up? Please tell me what you think
Thanks 95

Jeremy2012-05-29 22:28:24 Hello ahmed,

I'm unsure if your rent from the council will increase. But they might reserve the right to say you can't sub-let. Check your tenancy agreement carefully before you ring them to see how the conversation could go.

Your council tax won't go up. 96

Anna2012-07-14 12:47:09 Re - claiming local housing allowance (or other benefit) - if you live with someone - under current rules, you are only committing benefit fraud if you are living as though you were married (whether one or other partner is legally married to someone else or not) and claiming benefit. In the scenario where a landlord takes in a lodger who claims benefit, if there were grounds for suspicion, the benefit Compliance team might interview the claimant and possibly the landlord, and may want to visit the property to ensure that the two live separately (eg it's clear that the lodger lives in a separate room in the house). If they were very suspicious, they would also watch the house and interview neighbours. Each case like this is assessed on its merits. I know this from my time working at a jobcentre.

In the case of close relatives (eg parent and grown up child) this obviously doesn't apply, so benefit can still be claimed.

However, if you're related to your landlord (whether you're a tenant or a lodger), and you claim local housing allowance, most local authorities will be suspicious, and will need to ascertain that you're not setting up a contrived tenancy or claim, ie you will need to satisfy them that the renter would have still been obliged to pay the landlord rent if local housing allowance wasn't available. The Shelter website has some good information about this situation. 97

cardifflandlord2012-07-14 13:23:46 Anna: Thanks for the info, very useful for future reference.

Ahmed: If you have a 2 bedroomed flat, surely you and your wife have one bedroom and your daughter the second room? 98

Akilah2012-08-30 22:32:48 Thanks for sharing excellent informations. Your web site is so cool. I'm impressed by the details that you have on this blog. It reveals how nicely you understand this subject. Bookmarked this web page, will come back for extra articles. You, my friend, ROCK! I found simply the information I already searched everywhere and just couldn't come across. What a perfect web-site. 99

Peter2012-09-02 21:06:40 If letting a room out in your own home. No one but the person you rent to is entitled to enter your home, unless you agree. You should inform them of this. As you can about no animals, no smoking, or smoking. no drugs. no cooking using garlic, or curry. Anything that will cause you distress. If they don't agree, you tell them they are unsuitable, and refuse to accept them. All this must be agreed and signed in a written agreement. As you can evict them by giving 4 weeks notice. and they have no legal right to stay. Then after 4 weeks you lock them out, if they have refused to leave. This you are legally entitled to do. 100

Peter2012-09-02 21:23:41 Another thing. Allways get payed in cash. And never put in writing, that you are being payed by them. As far as the tax man is concerned, they are staying as friends without charge. 101

lulu2012-09-10 09:58:08 I claim jobseekers allowance,can i rent a room to someone who is on benefits and claim housing benefits? If so, how much does it affect my benefit? 102

lulu2012-09-10 09:59:58 I should add that i own my flat. 103

Anna2012-09-10 12:14:11 @Peter - until something goes wrong! Even though the agreement is verbal, it's still a legally enforceable agreement. See the Shelter website about evicting excluded occupiers. In addition, if you're earning more than £4250 a year from your lodger's rent payments, you're putting yourself in a position where a disgruntled lodger or ex lodger could report you to HMRC. On the subject of what you will and won't allow, you are right that the law takes the view (at least in England and Wales) that it's your home and you set the rules, but at the end of day, while a lodger is paying you a proper rent, and is treating you and your home with respect, they are entitled to regard it is their home too. If a landlord is too restrictive, it makes it difficult to keep a good lodger, and the relationship with the lodger will be strained.
@Lulu - please see Jeremy's post dated 2012-02-01 22:00:46. 104

JEG2012-09-13 17:02:07 I have two questions: I currently live with my disabled son in what was the family home. The mortgage is paid by my ex-husband. I receive both working and child tax credits. I would like my boyfriend to move in, would this affect my tax credits?

My second question is, my brother stays at my house, 1 night a week to do his washing. He doesn't have a registered home (he is a long distance driver) but he leaves his clothes here. I don't receive any payment from him. Would this affect my benefits?

I'd be very grateful for any help,
Thanks. 105

Nicholas2012-09-19 09:09:16 I'm a British Citizen (by descent) born and bred in Italy. As things are getting bad here (70% tax rate even for low income self employed people, with essentially no personal allowance), I'm planning to move to the UK. As a friend of mine (in Scotland) is looking for a lodger, I'd like your advice on a few questions: 1) moving in as a lodger, can I set that flat as official "residence"? (so as to pay income tax in the UK rather than Italy); 2) I'm a self employed translator (I need only a computer and internet connection), can I use that flat/room for my business?
Thanks for any help
Nick 106

Anna2012-09-19 11:21:12 @Nick

To answer your questions as best as I can - 1) so long as your friend agrees, of course you can use that as your main address (for tax, banking etc) although you and your friend need to be aware that if he gets a single person's council tax discount now, he will no longer qualify with someone else living there - although the rent you pay him should cover that (in the UK, including Scotland, a single occupier gets a 25% yearly discount).
2) It sounds to me like your business is mostly online - simply working from home doesn't necessarily class the property as business premises. However, if your business is more involved in the real world, for example, you have customers visiting a lot, your friend may need to check with his landlord (if he rents or owns subject to a lease - likely if it's a flat) and his mortgage provider and home insurance provider.
Another note - please make sure that you and your friend are absolutely clear about rent, how long you might live there for, house rules (e.g. visitors, overnight guests, cleaning etc) before you move in; also, get a written agreement. I recently let a room from an old friend of mine and we didn't set all this in place - only to fall out over my boyfriend staying over occasionally and having heavy hints dropped about needing the room back - until I offered to pay more rent which she wouldn't even stipulate in the first place!
Wishing you every success in your new life. 107

Nicholas2012-09-19 12:19:32 @ Anna
Thanks for your quick and exhaustive reply and suggestions!
Yes, my job is carried out ALL online (and I intend to retain all my Italian clients) so it should be fine!

Ciao 108

Josie2012-09-23 15:31:06 Can anyone tell me whether I can take in a lodger in a 2nd residence. I still own a property after moving away for my partners work and still live there 2-3 days per week. Just thought a bit of company would be good! 109

Sonia Jamshead2013-02-07 11:09:15 HI

I have a question.I only work 20 hours a week and as my daughter is disabled i am therefore getting a disability allowance and child tax credit.
As my income is very limited and it is hard to meet the ends meet so some one suggested me to rent one of the room of my house for extra income. But if i go for it then will this affect on the child tax credit benefit i am getting. In other words will i get less child tax credit as i will be getting the income from a renting a room...? Because if i get less child tax credits then there is no point in renting a room. So could please any one advise me. Thanks 110

joyce2013-04-03 00:05:57 I am thinking of takeing in a couple as lodgers,i am a pensioner on pension credit (just over £2 a week,lol)live in a two bedroom social houseing flat on my own,The house they live in is being sold and they are desperate for somewhere to live,both work and saving for their own place,I would like to be able to help them,seems a shame when i have a empty room spare but worried how it would affect me,not in it to make money,i am on full houseing council tax benefit,do you know or could advise on how this would affect my money .any help would be appreciated. 111

Benji2013-04-03 01:04:53 Joyce,

Ask your council.

A couple of points;
You might not be allowed to take in lodgers.
You would have to pay more council tax.
It may affect your other benefits.

Your best bet is to ask your council. 112

Anna2013-04-13 11:52:43 Hi Joyce

As the couple are working & therefore not exempt from Council Tax, as things currently stand, you would lose Council Tax & any other means tested benefit you are on, in proportion to your rental income from your lodgers.

As far as landlord's permission goes, if you rent from your local council, this should be fine (they normally only object if letting a room meant the accommodation becoming over crowded). However, housing associations sometimes put a clause disallowing room rental in the agreement. However, whoever your landlord is, is worth asking & you will need their written consent in any case.

Ironically, after October, I believe the government intends to allow social house tenants to keep their means tested benefits AND still receive rental income from a room let.

Anna 113

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