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…

Like this post? Then maybe you should sign up to my FREE newsletter so you receive more like it!

137 Comments- join the conversation...

Showing 87 - 137 comments (out of 137)
Guest Avatar
matt 28th January, 2012 @ 20:31

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....

Guest Avatar
matt 28th January, 2012 @ 20:41

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...

Guest Avatar
frediewins 28th January, 2012 @ 21:35

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

Guest Avatar
Jeremy 1st February, 2012 @ 22:00

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.

Guest Avatar
matt 2nd February, 2012 @ 13:44

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

Guest Avatar
paddy 24th February, 2012 @ 17:53

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.

Guest Avatar
Jeremy 25th February, 2012 @ 13:50

Hello paddy. Ask your landlord. Jeremy.

Guest Avatar
ahmed 9th May, 2012 @ 00:10

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

Guest Avatar
Jeremy 29th May, 2012 @ 22:28

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.

Guest Avatar
Anna 14th July, 2012 @ 12:47

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.

Guest Avatar
cardifflandlord 14th July, 2012 @ 13:23

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?

Guest Avatar
Akilah 30th August, 2012 @ 22:32

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.

Guest Avatar
Peter 2nd September, 2012 @ 21:06

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.

Guest Avatar
Peter 2nd September, 2012 @ 21:23

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.

Guest Avatar
lulu 10th September, 2012 @ 09:58

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?

Guest Avatar
lulu 10th September, 2012 @ 09:59

I should add that i own my flat.

Guest Avatar
Anna 10th September, 2012 @ 12:14

@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.

Guest Avatar
JEG 13th September, 2012 @ 17:02

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,

Guest Avatar
Nicholas 19th September, 2012 @ 09:09

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

Guest Avatar
Anna 19th September, 2012 @ 11:21


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.

Guest Avatar
Nicholas 19th September, 2012 @ 12:19

@ 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!


Guest Avatar
Josie 23rd September, 2012 @ 15:31

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!

Guest Avatar
Sonia Jamshead 7th February, 2013 @ 11:09


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

Guest Avatar
joyce 3rd April, 2013 @ 00:05

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.

Guest Avatar
Benji 3rd April, 2013 @ 01:04


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.

Guest Avatar
Anna 13th April, 2013 @ 11:52

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.


Guest Avatar
Deni 4th January, 2014 @ 12:15

Am i a lodger? I live with landlord but do not share kitchen and bathroom only hall entrance. I payed my full rent which should expire on the 29th jan. We were in discussion about me leaving for over a month (it was my decision to leave) but havent really set the date. The landlord asked me 2 days before xmas if im leaving and i said yes. Then she asked me when and i said the 29th as told will make sense...my rent was due on 29th. She told me she has someone to move in on 20th of jan. I told her i will try to find something but i never promised. As im away till 10th of jan i dont think i will find another place in such short period.
I have payed rent and she havent said i overplayed or i should not pay my full rent if im suppose to leave on 20th. She took all the money and week after told me i should leave by 20.
Do i have any rights to stay until my rent money expires?

Guest Avatar
Mandy Thomson 4th January, 2014 @ 14:21

Hi Deni,

I believe you are correct, strictly speaking, from what you say about your living arrangement (I'm assuming you live in England and Wales) you would be an occupier with basic protection - if you pay rent monthly, this entitles you to a month's written notice as you've correctly pointed out.
However, the law may well be on your side, but can you actually PROVE this - that is, is there a written rental agreement? If there is, does it stipulate a different notice period? If the agreement is verbal, can you show a regular standing order going through for the rent?
Whether there is definite evidence of the let or not, I would firstly approach your landlord on a friendly informal basis (it could just be an genuine oversight) and point out that you've paid until 29th January, and you need the extra time to find somewhere else to live.
If the landlord isn't very accommodating (that is, offering to pay you back the rent you've paid for 20 - 29th January or putting off the move in date of the new lodger) your only recourse will be the small claims court https://www.gov.uk/make-court-claim-for-money/overview ASSUMING as I said before, that you have definite proof that you had a rental agreement.
Source: I'm an experienced landlord and author of http://www.lodgersite.com

Guest Avatar
Deni 4th January, 2014 @ 15:36

Thanks for replying Mandy
Yes i live in England and i do have a written contract and it says that i pay rent 1 month advance on the 29th each month. Also it says that if i want to move out i should give enough notice preferably a month notice.
I pay my rent cash so dont really hv a proof. But i have message where it says i left my rent money on a table and she replied only thank you and nothing else.
My first notice i told her it would be on 5th of dec but she told me to think about it while she went away and i said ok and we haven't talked about it since then really. Briefly i told her to talk to another housemate to clean the house and she never really did. So i kept saying I'll see how it goes in a week or so and if it doesn't improve then i will move out. And then we had a conversation around 24th of dec and she asked me if I'm leaving and i said yes. And you know the rest, i told her on 29th and i knew she already had a friend who would take my room and said that that new girl is flexible.
I hope its not too confusing for you.

Guest Avatar
Mandy Thomson 4th January, 2014 @ 16:55

Hi Deni,

I think this might just be some confusion on your landlord's part about when you're moving out - you said:
"My first notice i told her it would be on 5th of dec but she told me to think about it while she went away and i said ok and we haven't talked about it since then really. Briefly i told her to talk to another housemate to clean the house and she never really did. So i kept saying I'll see how it goes in a week or so and if it doesn't improve then i will move out. And then we had a conversation around 24th of dec and she asked me if I'm leaving and i said yes. And you know the rest, i told her on 29th and i knew she already had a friend who would take my room and said that that new girl is flexible. "
Try to have a chat with the landlord and sort it amicably. If she insists the new lodger moves in on 20th, and also WON'T refund your nine days rent money, I'm afraid, as I said before, your only recourse is a letter of action (telling her to pay you by a specified date, usually within a fortnight) before taking her to the small claims court - but try not to let it come to that!

Guest Avatar
Deni 4th January, 2014 @ 18:48

Thank you for your help. Happy new year

Guest Avatar
Mandy Thomson 4th January, 2014 @ 19:11

Happy new year to you too - let me know how you get on and / or you have any more questions.

Kind regards,
Mandy lodgersite.com

Guest Avatar
Gareth Evans 10th February, 2014 @ 20:45

I have a joint mortgage with my mum (she is the guarantee, so the mortgage is paid through her bank)She has nothing to do with my house and has her own house which she lives in. Me and my mum both work and earn over 16000 a year.

I have a spare room and a friend of mine who currently unemployed and on benefits , wants to rent my spare room. Giving me housing benefits.

Am i still eligible for the scheme?
Is there anything i should know?


Guest Avatar
Mandy Thomson 10th February, 2014 @ 22:36

@Gareth - the rent a room scheme has nothing to do with whether the rent is paid by someone's benefit or not, this is something completely separate. Your own income from other sources (in your case your job and possibly your mother's job) doesn't have any bearing on this either.
Whether you would be eligible depends entirely on how much rent your lodger pays you - if the yearly rent is no more than £4,250 in total, you don't need to declare the income to HMRC. Try this ready reckoner http://www.lodgersite.com/INTRO.html.
Does your mother actually co-own the property with you, or she just your guarantor?
On a separate note, also have a look at this page http://www.lodgersite.com/Letting_to_a_Friend.html before you and your friend make any binding arrangement.
Kind regards,

Guest Avatar
Sammy 22nd April, 2014 @ 00:15

Slightly different problem here - please help!

I live in a studio flat. It is my main residence. However, I work on location and stay in various hotels or Winnebagos, etc. Mon to Friday and then return to the flat at weekends.

If I was to rent the flat from Mon-Fri, without my being there, would he/she be a tenant or a lodger? (ie. I still share ALL the rooms in the flat and live there but not on the same days of the week). I could, if necessary, pop back sometimes in the week and make a cup of tea in the kitchen if it changes the situation!

Guest Avatar
Sammy 22nd April, 2014 @ 00:18

...And I guess the fact it's a studio precludes me from joining the 'rent a room scheme'???

Guest Avatar
Mandy Thomson 22nd April, 2014 @ 13:09

Hi Sammy
As it’s still your main home, the person you let to is your lodger - a mere licensee (only having whatever rights and protection you agree to in your own contract between the two of you). A licensee is an excluded occupier (outside of the protection of the Housing Acts 1988, 1996, 2004). At best, they might be able to argue that they were a common law tenant (as they would only live there part time, but a common law tenant wouldn’t normally share living space) – still an excluded occupier and the same as a lodger with one exception – you would need a court order if the tenant refuses to leave, under the Protection from Eviction Act 1977 – this doesn’t apply to an ordinary lodger (licensee). However, if you still have mail going there, and keep most of your possessions there and can produce witnesses to say you live there, it’s unlikely they could prove that. Judy Niner, the founder of mondaytofriday.com actually did what you’re proposing – she became a midweek lodger in London, and during the week while she was away she let out her home in Oxfordshire to her own midweek lodger – perhaps she could share some tips with you - http://www.mondaytofriday.com/contact?
With any kind of lodger, this person is going to be living in your home – in your case, the person will have complete custody of your home when you’re not there – therefore, it’s imperative that you get someone you can trust – make sure you reference them thoroughly first – please see this http://www.lodgersite.com/Can_I_Trust_Them.html for how you can do this quickly, very cheaply and easily. Even if you know the person already, please, please sit down with them first and agree on house rules http://www.lodgersite.com/House_Rules.html and draw up a written agreement. At least with your arrangement, provided your lodger pays the rent, leaves the place as you expect to find it and doesn’t cause problems with your neighbours you should avoid a lot of the issues that lodgers and live in landlords normally clash over.
As for rent a room, HMRC Helpsheet 223 http://www.hmrc.gov.uk/helpsheets/hs223.pdf states: “Rent-a-Room applies only to owner occupiers and tenants who receive rent from letting furnished accommodation in their only or main home” – “furnished accommodation” – it doesn’t specifically state a room. If your rent is under £4,250, and you don’t fill out a tax return for other reasons, there is no action for you to take. Please see here for more advice about how it works http://www.lodgersite.com/INTRO.html.
I hope this helps and good luck with renting your flat.

Guest Avatar
Mandy Thomson 22nd April, 2014 @ 14:33

@Sammy - further to this, I meant to say that Rent a Room applies to people who share living accommodation - the definition of that being lounge, kitchen and/or bathroom - bedroom would definitely apply! If you live in the same building, but only share say, a front door, stairs and landing, but have separate bathroom and kitchen, then rent a room doesn't apply.
There are many live in landlords who spend time away from home but are still classed as live in landlords and as sharing living accommodation because it is still their main home. In the common law tenant scenario I describe above, this would normally apply where you have a landlord and tenant living within the same house say, but not sharing actual living accommodation.

Guest Avatar
Laura 16th May, 2014 @ 20:35

I'm thinking of taking in lodgers, but have a question regarding income tax. My husband is not working and has no income whilst I am a basic rate tax payer. Would it be allowed for all or most of the income from the renting rooms to be classed as my husband's income and therefore not have to pay tax (if the income is below his personal allowance)? Thanks.

Guest Avatar
Mandy Thomson 16th May, 2014 @ 21:20

Hi Laura,

You're allowed to disregard your rent a room income for tax purposes if it's less £4250 per tax year. This is somewhat misleading referred to as the Rent a Room Scheme - provided your income from room renting IS below £4,250, there is nothing for you to do - unless you do a tax return for other reasons, in which case you would simply declare it on your return, but still wouldn't be taxed (it doesn't matter how high your overall income is).
WHERE YOU AND YOUR HUSBAND are concerned, your £4,250 allowance is equally split between you; therefore, you could each disregard £2,125 before you'd need to declare it on a tax return. However, if this income is still less than your personal allowance, you still wouldn't pay tax. Please note that there are some situations where it makes sense to opt out of rent a room. Please see my rent a room tax assessment tool http://www.lodgersite.com/INTRO.html for more information and the rest of the site for other, equally important considerations with renting a room; please feel free to contact me via the site if you have any further questions.
Good luck with renting your room.
Mandy Thomson

Guest Avatar
Laura 18th May, 2014 @ 20:02


Thanks for your reply Mandy but what I am wondering and can't find info on is whether, if the income from renting rooms is over £4250 could we say that income up to £9,000 (or whatever the personal allowance rate now is) is his income (rather than mine). If it can be classed as his personal allowance we won't have to pay tax, but if it has to be 50/50 then I will have to pay tax on my 50%. So it makes a difference.


Guest Avatar
Mandy Thomson 19th May, 2014 @ 17:58

Hi Laura,

I'm afraid that if you're both living in the property as either joint owners or joint tenants, and the contract is therefore between the two of you (as joint resident landlords) and the lodger, the rental income would be divided 50/50 between you.
However, the government is making it possible to transfer some of an unused personal allowance to your spouse, effective from 2015/16 tax year:
"This measure will allow a spouse or civil partner who is not liable to income tax above the
basic rate to transfer up to £1,050 of their personal allowance to their spouse/civil partner,
provided that the recipient of the transfer is not liable to income tax above the basic rate" See https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293790/TIIN_2518_transferable_tax_allowance_for_married_couples_and_civil_partners.pdf.

Guest Avatar
Deirdre 15th August, 2014 @ 09:11


I am a new landlady and am wondering if anyone can tell me the average amount of hours their lodger spends in the house.

I think my guy is taking the michael, particularly when he has holiday from work and spends most of his time in his room.

I am not shy about speaking up, know it is my home etc., but getting an idea as to how other lodgers behave would either keep my trap shut or allow me to speak with confidence that it is not me just being petty.

Being new to this I have probably cocked up in not sorting this out in the beginning, but we do learn by our mistakes.

Any advice would be gratefully received.

Guest Avatar
Mandy Thomson 15th August, 2014 @ 13:15


Speaking from both a legal standpoint and a reasonable standpoint, the only way you can absolutely limit the amount of time your lodger spends at home or in his room (yes, HIS home as well as yours once he has moved in) is by taking a lodger who will only be there part time; e.g. a midweek lodger, and putting this in the contract (e.g. accommodation from Sunday night to Thursday night inclusive only).

Otherwise, you can only try to ensure, when you carry out your due diligence beforehand, that that person's lifestyle fits in with yours - i.e. you get along, share similar viewpoints and have habits and schedules that fit. You then agree rules, but these must be reasonable - it wouldn't be reasonable, for example, to stipulate that someone stays away while you have visitors see http://www.lodgersite.com/Interview_Questions.html for suggestions.

In your situation, you're clearly not very comfortable with this person in your home, otherwise, unless he was being disruptive in some way or running up big bills - in which case, either negotiate a rent increase (once out of any fixed term in your contract) or ask him to pay the difference - this shouldn't be an issue. Do you not have very much in common, or are you just not ready for a lodger fullstop?

Perhaps he might also feel awkward?

As I see it, you have two choices - either try to get to know him better and melt the ice, perhaps asking him to join your family for dinner etc once or twice a week - see this for more advice about living with and getting along with a lodger http://www.lodgersite.com/Dispute_Resolution.html.

If this doesn't work, or you can't bring yourself to do this, again, assuming you're not within a fixed term contract, just tell him nicely that you're really sorry, but it's not working out, and you need him to move out and serve notice. Give him at least a month's notice, and give him as much co-operation as you can over moving and storing his belongings.

I hope you both manage to resolve this.

Guest Avatar
Deborah 18th November, 2014 @ 16:45


I took in a lodger a couple of months ago and things did not go well! She took out her frustration on my husband & me whenever she had a bad day by seaking us out in the house and starting arguments over nothing. We asked her to move out by the end of the month to which she agreed. Then last week she had a massive outburst and physically threatened us, after which I told her she had to leave by the end of the week as she was making me scared to be in my own house. Luckily she left but is now demanding the rest of the months rent to be returned to her. This eventuality is not covered in our lodger agreement and I cannot find any legal text relating to this. To me the only reason we had to ask her to leave before the end of the month was because of her actions (the threat she made against us) so I feel we shouldn't have to return an income that we already counted on having this month. Of course she believes otherwise. Is there any legal ground that supports either our or her position?

Guest Avatar
Mandy Thomson 18th November, 2014 @ 17:29

Hi Deborah,

You're right, you are quite within your legal rights to keep the rent in those circumstances - after all, as you say, your former lodger's behaviour was not only unreasonable, but extreme, actually criminal- see http://www.harassmentlaw.co.uk/law/crimes.htm.

A lodger landlord is only legally obliged to give whatever notice is "reasonable" under the circumstances (under normal circumstances, this would usually be a month, or possibly less if rent is paid more frequently or a shorter notice has been agreed). In very extreme circumstances such as yours, a week is more than reasonable - you were threatened with violence, and didn't feel safe in your own home. See here for more detailed information about lodger notice periods: http://www.lodgersite.com/Serving_Notice_and_Eviction_Notice_Periods.html.

"Notice" doesn't just mean the period given, it also means entitlement to rent for that term. Therefore, if your lodger was supposed to give you a month's notice before moving out, you would be entitled to the rent for that month, even if she chose to move out before. By behaving in such a way as to give you no choice but to force her to move out sooner, she has effectively chosen to move out before the month was up.

It doesn't sound as if your former lodger is capable of being organised enough to successfully take out a claim against you for the rent money, and it costs money (payable upfront) to make a small claim, which she's unlikely to have. I've come across many situations like this, where a lodger, or sometimes even a tenant, has serious issues that makes just conducting their lives difficult, let alone take legal action. However, just in case, is there any evidence either way, such as witnesses or records of rent payments? Without evidence, it's just one party's word against the other's.

This also shows why it is crucial to thoroughly interview, agree rules with, and reference a lodger before you make any agreement for them to move in: http://www.lodgersite.com/Can_I_Trust_Them.html

Guest Avatar
Deborah 18th November, 2014 @ 20:43

Hi Mandy

Thank you for your advice. She paid rent in cash so there is no record of that. Our neighbours are witnesses to some of her anti-social behaviour so if it ever came to it they could provide statements. The lodger is currently refusing to return the keys to our house until we return her rent and deposit, so the outstanding 12 days rent will cover the change of locks (and the items she pinched from me, tho luckily none of them are of substantial value), and I can simply return her full deposit in the hope that this will get her out of our lives.

We will definitely do a more thorough background check for our next lodger! This was the first time we ever took in a lodger but I won't let this experience scare me off. My husband has decided to go back to university so we need this small income boost. Fingers crossed things go better with the next one!

Thanks again for all your help, have checked out your link too, very useful site!

Guest Avatar
Mandy Thomson 18th November, 2014 @ 21:46

Thanks, Deborah! Please get back to me if you need any advice in future - maybe one of your husband's fellow students might make a good next lodger? But even if it's someone you know a little, still talk to them, agree house rules (even if it's a relative of yours!) and reference them unless you know them well.

Also, if you decide to go the other way and just let to an already established friend, you have to be prepared to treat them more like a member of the family than a lodger, otherwise you risk your friendship - believe me, I've been there and done it!

Good luck with your next lodger and to your husband at uni!

Guest Avatar
Mark 22nd November, 2014 @ 08:50

I am working full time and paying for my house with a mortgage. I do not receive any benefits. My daughter (20yrs) recently returned from her 1st year at university to live with me and is now starting her 2nd year at university close to home which means she will be living with me. My question is can I legally charge her £1 a month rent and have the difference reflected in my tax code so I would in effect be getting tax relief on £4238 of my earned income?

Guest Avatar
Benji 22nd November, 2014 @ 10:30


Ha, ha!
I like your thinking but unfortunately it doesn't work like that. Your tax code remains unchanged. It just means you don't have to pay 20 pence tax on the months rent you receive.


Please leave a comment...

I'm a nobody

I'm a nobody





Letting / Estate Agent

Letting / Estate Agent









Leave a comment

Want FREE Landlord/Tenant advice from experienced Landlords?

Join our active Landlord community by registering to our Landlord Forum.
Learn, share and resolve your problems!