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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190 Comments- join the conversation...

Showing 140 - 190 comments (out of 190)
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Lucy 20th January, 2015 @ 23:38

Hi. My husband's granddad has a state pension and a work pension whilst receiving 25% reduction on council tax. He is thinking of the rent a room scheme as he owns a 2 bedroom bungalow. We are aware that he will have to pay full council tax but what we are unsure of is, if the lodger needs to claim housing benefit and asks for £100pw (as housing benefit never pay the full amount), would the ACTUAL rent received from housing benefit be used to calculate or the rent asked for on the housing benefit forms?

Sorry if this sounds confusing, i;ve actually confused myself.

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Mandy Thomson 21st January, 2015 @ 07:32

Hi Lucy,

First of all, tax paid against rental income (of any kind) received has no bearing whatsoever on how that rent is funded (that is, whether the tenant or lodger pays out of their own pocket or gets state help).
His tax position will only be affected if the rental income he receives is more than £4,250 a year (though he would need to declare it if does a tax return already). Please see http://www.lodgersite.com/INTRO.html for more information on the rent a room scheme.
As for his benefit position, from what you say, the only benefit he receives is the single occupiers council tax discount. As you say, this is likely to be affected, unless the lodger is a student - most university students, certainly undergraduates, are exempt from council tax, so he would continue to be regarded as the sole single occupier in that situation. However, if the lodger is on benefits, they are NOT exempt from council tax (the state pays it for them) so the landlord would lose his single occupant discount

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steve 26th January, 2015 @ 18:33

Hi, my ex wife is claiming rent benefit as she lives in a flat. I still live in the family home and considering renting out a room in the home. Will the income I get affect the benefit my ex-wife is claiming? we are currently just separated an not divorced and her name is still showing as joint on our mortgage? the person they may rent will have to claim benefit and have it paid into my bank account so I cannot just be paid cash.Will my wifes rent benefit be affected?

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Mandy Thomson 27th January, 2015 @ 07:35


Provided you've both informed the DWP and other interested parties, including your mortgage provider, this is perfectly ok - provided your ex wife has moved into the flat where she now lives formerly and can show proof of address (such as utility bills, letters from government departments, bank statements and/or council tax in her name within the last 3 months).

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Akua 27th January, 2015 @ 10:48

I have a spareroom and looking to rent to a friends son who is on benefits so will be paying through housing benefits.

I'm thinking of joining the rent scheme. Other than the HMRC, which other agencies get notified?

If I'm within the the scheme's limited income, will it reflect in my p60 to boost up my annual income?


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Mandy Thomson 27th January, 2015 @ 12:47


You don't join a scheme - if your income from renting your spare room is £4,250 or under - regardless of your overall income from other sources, you don't need to take any action as far as HMRC is concerned.

The name is misleading and I wish they would change it. They call it a scheme because you can in fact opt out if you choose to, usually because you've incurred expenses through letting your room and want to claim a tax refund. For more information please see http://www.lodgersite.com/INTRO.html

If you DO pay tax on your rental income (because it's over £4,250), you can ask HMRC to tax you through PAYE, in which case it would be on your P60. Otherwise, if you needed to prove your rental income, in the absence of an accountant, you would need to request an SA302 - so even if you were using your rent a room exemption, you would need to do a tax return.

If you claim means tested benefits, including a single person's council tax discount, these will be affected - please see "If you claim any kind of means tested benefit" (last bullet point on page) http://www.lodgersite.com/Who_To_Inform.html

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Sharon Lowry 27th January, 2015 @ 19:49

Living as a lodger I can tell you the lodger gets a shit deal. I have to put up with my landlord filthy habits with no right to complain. The house is in an awful condition, he leaves rotting chicken carcasses in the oven and dog shit on the landing. Now the lock on the front door is broken and despite several break ins on the same street he can't be arsed to fix it he just keep saying 'I'll get somebody', but it's been two weeks now of me living in an unsecured house with no right to do anything about it.

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Mandy Thomson 27th January, 2015 @ 20:14

@Sharon Lowry

That's absolutely appalling, and by far the worst room letting account I've come across!

The standard pat advice seems to be, "well it's only a room, you're only a lodger and if you don't like it you just have to put up or move" - I am so fed up with reading utter nonsense like that - unless you were causing an equal problem for your landlord, and assuming you're paying your rent, you have every right to compensation! Your landlord, whether he likes it or not, is subject to contract law, which is implied, as is your right to quiet enjoyment of the property you're renting. However, you will need to be able to produce plenty of evidence of your let and the landlord's unacceptable behaviour - witnesses, photos (taken with a newspaper to prove the date), diary entries, emails and other documents. If you have this including evidence of your letting agreement, you should be able to take out a claim against your landlord in the small claims court. Please see the comment by Ian Narbeth, solicitor (where he advises another lodger with a problem landlord) here http://www.property118.com/noisy-landlady-night-keeps-teacher-awake/71534/#comments

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Benji 28th January, 2015 @ 20:35


That's absolutely appalling, and by far the worst room letting account I've come across!

Really? What a sheltered life you lead.

However, you will need to be able to produce plenty of evidence of your let and the landlord's unacceptable behaviour witnesses, photos (taken with a newspaper to prove the date), diary entries, emails and other documents.

Just supposing a lodger does all this and a Judge finds in their favour. How much compensation do you think would be awarded?

Please see the comment by Ian Narbeth, solicitor (where he advises another lodger with a problem landlord) here http://www.property118.com/noisy-landlady-night-keeps-teacher-awake/71534/#comments

I would question the advice of anyone advising a lodger to "check that any deposit has been correctly protected and Prescribed Information given."

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Mandy Thomson 29th January, 2015 @ 11:55


"That's absolutely appalling, and by far the worst room letting account I've come across!

Really? What a sheltered life you lead."

Really?? You think this is in any way acceptable or even NORMAL living conditions?? I've seen better run squats! As for my "sheltered life" who are you to pass judgment when you know absolutely nothing about me?

"However, you will need to be able to produce plenty of evidence of your let and the landlord's unacceptable behaviour witnesses, photos (taken with a newspaper to prove the date), diary entries, emails and other documents.

Just supposing a lodger does all this and a Judge finds in their favour. How much compensation do you think would be awarded?"

A refund of rent payments for starters, the amount dependent on how serious the breach of lodger's quiet enjoyment is? But, if the nuisance is serious enough to be putting the lodger in danger, as might be the case here, this is another matter http://www.findlaw.co.uk/law/accidents_and_injuries/accident_claims/500043.html.... However, in practice, the lodger is only going to prosecute their landlord if they're prepared to move out (why wouldn't they be in living conditions like that?) and there's a good chance the landlord can be made to pay back the money...

Aside from the normal duty of care that we are all bound by under the Occupiers Liability Act 1957 to visitors to our homes, although they're not subject to usual landlord's obligations to repair, resident landlords are still subject to SOME of the landlord health and safety legislation that other landlords are bound by, for example, they must get the gas safety check done each year and they must ensure that the furniture in the lodger's room (but not anywhere else in the house or flat) conforms to fire safety standards http://www.lodgersite.com/Health_and_Safety.html

"Please see the comment by Ian Narbeth, solicitor (where he advises another lodger with a problem landlord) here http://www.property118.com/noisy-landlady-night-keeps-teacher-awake/71534/#comments

I would question the advice of anyone advising a lodger to 'check that any deposit has been correctly protected and Prescribed Information given.'"

While Ian Narbeth is incorrect about lodger's deposits, his advice is otherwise still sound as a licensee is as much entitled to a safe environment and quiet enjoyment of their home as much as tenants or indeed just bare licensees (casual visitors) for the reasons I've given above.

In Sharon's case, I would advise her to contact Shelter and environmental health at her local council - they might prosecute the landlord on her behalf, if he doesn't heed their warnings. Her landlord is exactly the kind of slumlord that gives the rest of us good landlords a bad name, and people like that simply fuel Shelter's antipathy toward private landlords.

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Rachel 17th February, 2015 @ 06:59

Hi I rent a room Monday - Friday and have a good relationship with my lodger, he pays £300 pm for a very nice and large loft room with ensuite. I change his bedding and towels once a week for him and am considering putting his rent up as my bills have gone up significantly. I'm a little scared of broaching the subject, any tips please on how to discuss with him. Many thanks

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Mandy Thomson 19th February, 2015 @ 13:47

Hi Rachel

£300pcm for an ensuite loft room, even midweek sounds like an absolute bargain. The first £100 - £200 of that will simply be covering utilities and possibly council tax and other costs. I paid my friend £300pcm for her daughter's bedroom, with most of her stuff still in situ, and wasn't exactly encouraged to regard it is home either.

Legally, you are entitled to raise the rent, provided you're not within a fixed period on your rental agreement. For a guide to rates in your area, download Spareroom's Rental Index: http://london.spareroom.co.uk/rentalindex_download (this covers the whole UK, not just London). As you are probably aware, a midweek let attracts 60 - 70% of the rent of a full time agreement.

Knowing the full amount you can charge will give you the confidence to broach the subject with your lodger - start with the highest figure and be prepared for your lodger to negotiate down. Even if you live in an area that attracts a low rent, £300 for a lovely ensuite loft still sounds like very little to me. In addition, you are providing a very valuable commodity and are therefore as entitled as anyone else to earn money from doing so.

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Stuart 5th March, 2015 @ 20:00

Hi I've recently had a work colleague stay in my spare room and have not charged them any rent just asked them to pay towards food and the typical utility bills electric and water. I've not done it to make or earn money just they were in a high rise which were cold and damp and as I had a spare room I felt it would give me company and a drinking partner and them a better way of living. She was claiming some sort of tax credit which I am not entirely sure what they were as it's none of my business. However in the last recent few months we have become even closer as friends and as a result decided to let the HMRC know that we are now together and to cancel all her single benefit claims. However, they are trying to back date is on this saying we have been together since she moved in which is not the case and I actually have a wrtten contract which has been signed to show that she was just a friend needing somewhere to stay. Can't you help me on this?

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Mandy Thomson 6th March, 2015 @ 09:01

Hi Stuart,

We had one or two cases like yours when I worked at a Job Centre a few years ago - this sort of situation (where you have a dispute about whether two people are in a relationship and living together or not).

Despite what various people might tell you, including, unfortunately, some DWP staff (who aren't always well trained enough to be aware of rules around less than straight forward situations), there are no hard and fast rules around this - for example, there's an urban myth that a partner can only stay a certain number of nights or shouldn't stay at all.

Instead, what happens is the compliance team will investigate, interviewing both parties, and collecting as much evidence as possible - particularly bank statements from you both. They might also approach people such as your neighbours, employers, friends and family. At the end of the day, it should be decided either way on the evidence available.

Your friend should ask for an appeal of the decision - she may need to be very firm and persistent about this. If the appeal is granted, you should be prepared to be as co-operative and truthful with the investigation as you can, as anything withheld is likely to go against you. Please also read this very thoroughly http://www.taxcc.org/TCC_News/05/02/2013/hmrc-say-youre-a-couple-when-youre-not/

I would also seek help from Citizens Advice, especially if you encounter any resistance along the way.

Good luck.

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Diane 14th March, 2015 @ 10:44

Hi can anyone tell me where i can buy a Lodger Agreement ? Ive looked online but you have to have a printer & ive not got one. I would like to be able to get one delivered to my home....Thanks in advance

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Mandy Thomson 16th March, 2015 @ 20:51


You can buy hard copy agreements from WHSmith - either their online store or on the high street.

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Yvonne 19th March, 2015 @ 11:34

Hi I own my own home that I live in with my daughter I work 19hours a week and get tax credits.can I rent a room out and if so will it affect my tax credits ? How much rent can I charge a person ?

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Mandy Thomson 24th March, 2015 @ 14:14


Sorry for the delay in responding to this. Tax credits are regarded as a means tested benefit, which means that if you have a lodger you can keep the first £20 per week rental income without it affecting your benefit, but the remainder is affected - unless you provide meals for the lodger, where you can keep half of the remainder.

For example, say you're paid £90 per week rent, but you always provide a cooked breakfast for your lodger, you would make £55 per week rental income (made up of the first £20 that is disregarded, plus one half of the remaining £70, which is £35).

To determine your rent, please see http://www.lodgersite.com/Rent.html

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Lucy 7th April, 2015 @ 12:35

Hi, I am a landlord who rents a master bedroom with ensuite for £350 which includes use of the kitchen, driveway, garden. My lodger has been with me since December and appears to be of the opinion that however many nights I have a guest to stay over, that he can have the same. For example, my son has just been visiting and stayed for 2 nights, so the lodger had his girlfriend stay for 2 nights without asking. We have a lodger licence agreement which states a verbal agreement that his girlfriend can stay on Saturday nights, which she has done since he moved in. Now suddenly he's claiming he knows his rights and she can stay more often. I can't find anything anywhere which covers the lodgers having people staying overnight. He signed a licence agreement when he moved in for the verbal agreement and now he is moving the goal posts. I also know that he is smoking in the room, and I don't mean normal cigarettes, when he knows the room is non smoking.
Can anyone shed some light on this please?

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Mandy Thomson 8th April, 2015 @ 07:28

Hi Lucy

As far as the law is concerned (in all countries, not just England), a lodger has absolutely no right to have overnight guests, unless it's been agreed as part of the letting contract (the lodger agreement, which can be written or verbal - though if verbal, very hard for either party to prove in a dispute - if it can't be proved, the basic default legal standard would then stand).

However, having said that, in practice if a lodger is paying rent and behaving properly, it should be regarded as their home too, and it's not unreasonable to expect to have your partner overnight on occasion in your own home, except if it's a house share of any description, your house mates and pre-agreed house rules obviously must be considered and there should be give and take. I have said on my website that 2 nights a week is reasonable, but Spareroom suggest the partner stays the same number of nights the lodger stays over at their place (which assumes the partner is in a position to have a regular overnight guest).

I suspect in your case, your lodger might have been reading some of this ideal best practice advice and either misinterpreted it as his legal right or is trying it on....

As I've said, this does assume an ideal scenario, where the lodger is someone you know for certain is of good character and you not only trust them, but you feel comfortable with them in your home - therefore, before letting to a lodger, it's crucial to run proper references, interview them and get to know them a bit first, be aware of your own trigger points and what you can realistically live with, and ensure you and your lodger agree on house rules before either of you commit yourselves to the arrangement.

It sounds to me like this isn't the case here, as the lodger is breaking your agreement on at least 2 counts, and it doesn't sound like there's a good relationship between the two of you - you can't have someone living in your home on that basis. Therefore - assuming you don't have a fixed term agreement - I suggest just telling your lodger politely that you don't think it's working, and you're giving him a month's notice to move out (a month is the maximum legal standard - he will have no basis to argue that, provided you he's not owed rent or deposit, and the agreement isn't fixed term).

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Mandy Thomson 8th April, 2015 @ 07:39

PS I forgot to say to put the notice in writing, as well as telling him. Email is fine, provided you keep a copy and can prove he received it.

If he does dispute receipt, I'd advise posting and getting proof of postage. While it sounds OTT to post to your own home, it will give you piece of mind that he can't possibly dispute it.

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Lucy 8th April, 2015 @ 19:02

Thanks for the advice, he will be getting his marching orders!

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Mandy Thomson 8th April, 2015 @ 20:24

He certainly sounds like a keeper - NOT!

For further advice on serving notice on a problem lodger, please see http://www.lodgersite.com/Serving_notice_and_eviction.html

Good luck.

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Gareth 10th April, 2015 @ 15:34

Parents who now have a spare room should really consider what they want to do with it, lodgers can come in really handy. I have some more information here to help parents with empty rooms: https://www.flatmaterooms.co.uk/blog/parents-filling-empty-bedrooms

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Mandy Thomson 11th April, 2015 @ 08:26


Yes, that is a good idea and a good way to use the room. However, living with a lodger isn't for everyone. There's more to it than simply having a spare room and considering your tax position - you have to really think about your tolerance levels first, and be very honest with yourself, and only when you believe you really can tolerate another adult in your living space find someone compatible, REFERENCE THEM THOROUGHLY and agree on house rules - before either of you make any commitment to the arrangement. See here for how to prepare for a lodger: http://www.lodgersite.com/BeforeLodgerMovesIn.html

Empty nesters particularly need to get over their feelings of loss and loneliness before letting their child's room. If they don't, they may find themselves subconsciously resenting the lodger, as I believe might have been the case when I rented my empty nester friend's spare room (the fact she insisted on keeping most of her daughter's belongings in the room while I was supposed to be living in it was my first clue...:-) ).

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mary 21st April, 2015 @ 18:37

I live off my work pension. Can I have an elderly (88 yrs old )relative "rent a room" and have housing benefits pay for it.
I currently receive carers allowance for this person.

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Mandy Thomson 22nd April, 2015 @ 08:19

Hi Mary

When the landlord and tenant or lodger are related, you will normally be required to satisfy the local authority that it isn't a contrived claim - that is, the landlord can't do without the rent and would be forced to evict the lodger or tenant if they were unable to pay. The benefit claimant is also normally required to produce a valid rental agreement (in this case, a lodger agreement signed by both parties).

As your relative is already living with you, and particularly given her needs, you're unlikely to throw her out for not paying rent, so you're likely to struggle to convince the council that it's not a contrived claim - indeed, as you're family, they are likely to see you both as forming one household, particularly as you're also caring for the lady (for example, live in child carers - nannies and au pairs - are generally considered to be part of the same household as the family they work for and live with). I'm not aware of anyone successfully claiming local housing allowance (LHA - housing benefit for private tenants and lodgers) to rent a room in the home of a relative.

However, although she may not qualify for LHA, she may well qualify for other benefits on top of what she currently receives, attendance allowance for example. Your local Age UK branch will be able to offer advice, and even help you or your relative to complete the claim forms. I personally know someone who had suffered a stroke and successfully claimed attendance allowance after an Age UK advisor helped her to complete the claim form.

Please visit these links from Age UK for further information: http://www.ageuk.org.uk/Documents/EN-GB/Information-guides/AgeUKIG43_More_Money_In_Your_Pocket_inf.pdf?epslanguage=en-GB?dtrk=true http://www.ageuk.org.uk/Documents/EN-GB/Information-guides/AgeUKIG13_Advice_for_carers_inf.pdf?epslanguage=en-GB?dtrk=true

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mary 23rd April, 2015 @ 23:45

Thanks for taking the time to reply.

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Danny Cole 24th April, 2015 @ 23:15

Thanks for the info, I'm 100% sure I qualify (as a lodger) but how do I apply? I had a copy of the bulky housing benefits form and when I shown it to the landlady (who lives with me now) she said it is the wrong form because it asks questions about the income of everyone in the household and asks questions as if I'm the home-owner. She said I need the 'rent-a-room' form and claims she has filled one out before and it's only about 3 pages. I have been to the council, spoke to 5 people including the head of housing department and they said there is no such thing as the form. I can't remember what form the councillor mentioned but she recons it's a form for when you're already claiming housing benefits and are just changing address. Is this right? Am I supposed to fill out the housing benefit form just to apply as a lodger? Also the rent is pay-as-you go if you like so do I tick the 'I live in permanent accommodation' or 'temporary accommodation' box? Thanks in advance!!

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Donna 1st May, 2015 @ 18:38

I have my ex partners disabled mother living with me, she pays me rent and I receive carers allowance for her, I work part time and receive. Working tax credits also receiving child tax credits for my daughter, do I need to inform anyone ? I did declare to tax credits that I received carers allowance for my daughters grandmother. Any advice would be appreciated

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Mandy Thomson 3rd May, 2015 @ 10:20

Hi Donna,

As I've commented above, a relative who lives with you is not counted as a "sub tenant" (lodger) and as such, "rent" payments would simply be regarded as her keep, which is allowed.

If the lady receives pension credit, this will NOT count against your tax credits, neither will the carer's allowance you receive for her. If in doubt, complete the HMRC Tax Credit calculator (obviously, assume you are on your current income MINUS the tax credits) - the carer's allowance counts as "social security": http://taxcredits.hmrc.gov.uk/Qualify/DIQHousehold.aspx

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Mandy Thomson 3rd May, 2015 @ 10:41

Hi Danny

Each council will have their own forms, and ways of applying for local housing allowance. As far as I'm aware, there is no difference in the process for applying whether you're renting a room, a flat, or a house.

I would assume that this would be covered when they ask you to specify the actual premises you're renting, which in your case will be a room, an essential question, as anyone single and under 35 will only qualify for the single room rate even if they ARE renting a whole house or flat.

BTW, your household is just you; you and your landlord form two separate households as you are her lodger, not her a member of her family or her employee. And yes, you would state that you live in PERMANENT accommodation, unless your lodger agreement is for a short term, such as a few weeks. Last but not least, you will need a paper lodger agreement, signed by both you and your landlord.

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frank 4th May, 2015 @ 14:56

hello,my brother owns a house (that he doesn't reside in) and has decided to rent the rooms out individually rather than the whole house,would i be able rent one of the rooms and claim housing benefit for it?(i am on sickness benefit). thanks

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Mandy Thomson 5th May, 2015 @ 08:20

Hi Frank

As you wouldn't be living with your brother, there's no reason why you shouldn't be eligible - however, you will both be interviewed and will need to convince the council that it's not a contrived tenancy - that is, your brother/landlord is not in a position to make a concession for you if you can't pay the rent, and a proper tenancy agreement (AST) is in place.

You and your brother are probably well aware of this, but just for the record, you wouldn't be a lodger, you would be a full tenant on an AST and your brother is likely to need an HMO licence (either mandatory, or it might be subject to something called additional licensing - depending on the number tenants and your particular council's policy) - see https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/15652/HMO_Lic_landlords_guide.pdf

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Tina 30th May, 2015 @ 20:54

A friend has been renting out a room in his house to a previous partner. They both share bathroom kitchen and living area. This guy is now bringing drugs into the house, getting high, causing arguments and damaging the property. He has insufficient money to last the month so even though rent paid, after two weeks he starts eating my friends food. When argument starts he says his mother is a lawyer and he knows his rights. There is no written agreement. Can my friend give him notice to leave - he says he has tenants rights.
My friend is worried about the drugs, the people he brings home and how much more damage will be caused. Lighting and tv ruined so far.

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Mandy Thomson 31st May, 2015 @ 12:02

Hi Tina

If his mother is a lawyer (whatever that means - UK lawyers are usually known as solicitors or barristers, with a small number of supporting professions such as para legals), he should clearly understand the difference between a tenant and a licensee, which he is most likely to be in this situation, as he lives in his landlord's home and shares living accommodation with the landlord - that is assuming the resident landlord didn't move in AFTER the lodger and/or the two housemates didn't sign a joint tenancy agreement with an external landlord to rent the property.

If the resident landlord stayed away long term and/or the lodger has a lock on his room that the resident landlord can't unlock, the lodger might try to argue that he has a common law or excluded tenancy (http://www.lodgersite.com/What_is_a_Lodger.html) - though whether he would be successful would depend on the circumstances.

However, from the information you've provided, I would say this is just a bog standard lodger agreement (the lodger being a licensee) which means he only has the right to a month's notice maximum, which under the circumstances you describe could quite reasonably be shortened!

Please see http://www.lodgersite.com/Serving_notice_and_eviction.html for more detailed guidance on evicting a lodger.

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Jane 1st June, 2015 @ 18:45

Can a ex partner let out rooms under the rent a room scheme without permission from the joint mortgagee who has moved out until the house can be sold?

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Mandy Thomson 2nd June, 2015 @ 08:33

Hi Jane

Legally, a landlord (even of a whole property) does not necessarily have to be the owner, so in your situation, legally there is no reason why the partner who still lives at the property can't be the sole landlord of a future lodger.

However, the legal position and the tax position don't always match. Where HMRC are concerned, how the joint owners are taxed will depend on how the property is owned. As you may be aware, joint owners can own the title to their property as joint beneficial owners or as tenants in common. If the owners hold the title as joint owners, they are assumed to have an equal 50/50 share of the title and HMRC will also treat them as having a 50/50 share of any rental income.

I would seek advice from an accountant or solicitor who is familiar with renting property with joint owners, but as I would interpret it, in your situation, if the property is no longer the MAIN HOME of the owner who has moved out, that person CAN'T be a live in landlord to a lodger living in that property, so HMRC's DEFAULT position would be that that person is liable to pay tax on their share of the lodger's rental income as a regular live out landlord.

There is however a way around this. Tenants in common can divide the property as they see fit, so even 99/1 is possible (lenders are not concerned about this arrangement, as both owners are still liable to pay the mortgage). If you're separated, holding the property as tenants in common would be advisable in any case. To divide shares unequally, you will need to draw up a declaration of trust between you.

If the property is held as tenants in common in unequal shares with a supporting declaration of trust, you can then advise HMRC that only the live in landlord is liable for tax on the rental income, and if this falls below the rent a room threshold, no tax is payable. However, as this is a more complicated situation, they may ask you both to complete tax returns.

Finally, to be fair to the lodger, and to prevent a nasty dispute, I would be upfront from the start about the temporary nature of the letting arrangement and stipulate an end date on the lodger agreement for well before the date you would expect the property to be sold. Also, make sure the lodger is referenced thoroughly http://www.lodgersite.com/Can_I_Trust_Them.html as the last thing needed in this situation is the lodger from Hell and an acrimonious dispute with the lodger!

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Esther 4th June, 2015 @ 16:52

My cousin has a lodger staying with her and just found out
through company check that her lodger has used
her address to registered a business as a Limited

What are the implications and what is suppose to

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Mandy Thomson 5th June, 2015 @ 09:50

Hi Esther,

As you aware, your cousin's address is the official address of that company, and as such is a matter of public record for anyone and everyone to see. That means that any customer, creditor or anyone else with an interest in that company could come knocking at your cousin's door. This DOESN'T mean that your cousin is in any way liable, or that her credit record could be affected.

You cousin may also need permission to carry out a business from home from her mortgage provider or landlord (whether that's the freeholder if her property is leasehold or a landlord she rents from).

Assuming this isn't a part time lodger, it is the lodger's home too but even so, he isn't the main householder and he IS sharing with someone else - as such, he is really out of order to not at least mention this to your cousin first, though he should have sought her permission - as should anyone who lives with someone else, in whatever capacity.

This might just have been thoughtlessness and ignorance on the part of the lodger, or at the other extreme, could be a cover for fraud or mismanagement. Anyone setting up a business can easily obtain a local virtual address that's not a P.O. number, so why didn't he do this?

Your cousin should raise the matter with Companies House https://www.gov.uk/government/publications/reporting-fraud-about-a-company-to-companies-house/reporting-fraud-to-companies-house and depending on the lodger's reaction, perhaps serve notice on him: http://www.lodgersite.com/Serving_Notice_and_Eviction_Notice_Periods.html

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Liam 22nd June, 2015 @ 10:46


I have found a potential lodger who wants to move into a very large double bedsit room for my London house.

I do not get housing benefit and do not pay mortgage nor rent for my house as I owe my house outright.

The rent is £675 which is sufficient enough for me to give up my jobseeker allowance as I am currently unemployed & disabled.

Currently I get child benefit and tax credits for my sole child.

I would like to find out if the rent of £675 would affect my child tax credits.

I have plans to become self-employed once I get lodger for the bedsit room.

Would it be possible for me to declare myself as 'self-employed' and rely on rental income?

I also am thinking of making a claim for working tax credit because I have plans to become freelance designer, working from home and rely on small income from freelance design work.

Please advise me

many thanks

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Mandy Thomson 22nd June, 2015 @ 13:52

Hi Liam

As I advised Yvonne already on this thread, you can keep the first £20 per week room rental income without it affecting any kind of means tested benefit, including child tax credit, but there is a way you might be able to keep more: please see http://www.lodgersite.com/Who_To_Inform.html - go to the paragraph that starts, "If you claim any kind of means tested benefit...".

I strongly suggest you do not simply give up your job seeker's allowance or any other benefit as £675 a month simply isn't enough to live on - especially with a child (believe me - I tried it and I was single and childless)!

JSA claimants can get a grant and assistance toward starting their own business under the Enterprise Allowance Scheme https://www.gov.uk/government/collections/new-enterprise-allowance-campaign, which is naturally a much easier transition than simply terminating your claim and going it alone. The advisors at your job centre will be able to help with this; it's probably also worth checking for certain that there aren't disability related benefits you might be entitled to that you're not currently claiming.

As for paying tax, as you'll be making way in excess of the current £4,250 rent a room scheme tax annual threshold, I'm afraid you'll be filling out a tax return each year (which you'll have to do anyway if you start your own business), but you will only have to pay income tax when your total annual income exceeds the personal allowance, which is £10,600 for this tax year. However, you can still declare the first £4,250 of your room rental income as a rent a room tax exemption, and only pay tax (assuming your TOTAL income is over £10,600) against the portion of rental income that's above that. As this is a complex subject, I've written a handy rent a room tax wizard for my site which will take you through the different scenarios: http://www.lodgersite.com/INTRO.html.

How you'll be taxed against your design business will depend on whether you operate as a sole trader or start a limited company, which the Enterprise Scheme should be able to advise you on.

Best of luck with your room rental and design businesses!

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Mandy Thomson 22nd June, 2015 @ 14:04


PS Your ability to claim working tax credit once you start your business will depend on what sort of income you make from it and the number of hours you'll be working on average.

You also described the room you'll be letting out as a "bedsit". If this will mean the lodger won't share your bathroom, kitchen or lounge (i.e. living accommodation) then you won't be eligible for the rent room tax exemption.

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Liam 23rd June, 2015 @ 19:55

Many thanks for your replies

The room that I plan to rent out actually is a very large double room. The potential lodger will be sharing the kitchen with us. The shower room with a toilet is located next to the kitchen which means that the toilet will be shared by us, visitors and lodger.

The most pressuring issues is council tax. At this moment I am paying only £5 per month for my council taxes as I am the sole adult in the house with a dependent child under age of 18 years old.

I currently am in receipt of JSA, Child Tax Credits, child benefit for my daughter and also am in receipt of my Disability Living Allowance.

If the lodger moves into the room & will be paying £675 per month, will I have to inform my council of the changes?

Will the council increase the council tax charges from £5 to higher?

many thanks

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Mandy Thomson 24th June, 2015 @ 09:40

Hi Liam

Yes, you will have to inform council tax. This would apply even if you were currently working and simply getting the single occupier's 25% discount, but DEFINITELY will apply in your present situation.

As I explained in my original response, the first £20 per week room rental income is disregarded for ALL your means tested benefits, but (as I've set on my website, http://www.lodgersite.com/Who_To_Inform.html - go to the paragraph that starts, "If you claim any kind of means tested benefit...".) you can keep 50% on top of the first £20 if you provide at least one meal a day for your lodger.

I would make an appointment at your jobcentre for an assessment of your potential income before you commit to taking the lodger or starting your design business: https://www.gov.uk/moving-from-benefits-to-work/starting-your-own-business

I don't know how much you're currently getting on benefits, but it must be much more than you would get if you were renting your room without providing meals.

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Fiona 29th June, 2015 @ 12:09

I've just gone self employed after quite a bit of time on sickness benefit. I am hoping to get tax credits sorted whilst I get my business up and running. I had pondered with the idea of letting my spare bedroom out at the moment I receive council tax benefit reduction for myself and my daughter and wondered how this would be affected. Also I pay part payment to my mortgage my ex partner pays the rest...the house is mine in the court settlement but at the moment his name is still on the mortgage for legal reasons. Any help and advice would be gratefully received

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Emma 7th July, 2015 @ 16:58


I am married since 2011 however we have been separated since 2012. I moved in with him in feburary 2015 but things didnt work out. we have a 2 years old daughter. We both work full time. However I may have to hand in notice as i have been diagonosed with Rhumatoid Arthrits and struggling. I have been off on sick note for 4/5 weeks now.

My question is, I have my mums place to go back but shes disabled and is unable to look after my daughter while I am ill myself. My husband has some other family members living at his place who used to look after my daughter while I was at work. He is offering me to stay if I wish in a room in the house as a lodger. We were not eligible to claim anytrhing due to our income but now that i would be on my own I would need financial assistence. He would be paying weekly support for our daughter. How would I prove we have separate household if I need to claim tax credits/income support.

Any help would be appreciated.


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Peter 24th July, 2015 @ 12:55

A few years back me and my partner split up, I stayed in the house and rented two rooms for £300 each month, this helped pay mortgage and bills etc. I still own the property jointly with her, but she lives elsewhere. The mortgage on the property is around £600 most of which being interest, the electricity bills are high and it takes about £900- £1000 a month to cover costs of the house. I work full time. I was unaware of the rent a room scheme or informing HMRC, and now a little concerned that I owe some tax, do I contact them and let them know or just leave it? is it likely I would be faced with a high bill? or will the expenses I have to pay counterbalance I don't make any profit at all, some months in the summer about £50 - £100 which I save for repairs and winter bills.

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laura 9th September, 2015 @ 18:05

My grandma wants to rent out two room on her house, but the person needs to claim housing benefit. Will the income of rent affect the amount of pension she is currently getting?

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Dave 10th September, 2015 @ 07:47

My ex wife and I are divorced, and she is currently living in a one bed house on housing benefit and income support.However, she can no longer afford the top up on the rent

I have a large house in my own name. Can I rent out a room with shared facilities in the rest of the house to her while she still retains either / both of

a) Housing benefit
b) Income support

Can I let her live there rent free, but with an agreed contribution to utilities that she will pay for out of her income support?

Would any contribution to utilities be taxable?

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Sarah 21st November, 2015 @ 20:02

I am getting child tax credit, but was wondering if I took in a lodger and only charged £20 a week, would that be acceptable as if I charged any more I wouldn't be any better off anyway. This would be for someone stopping Mon-Fri?


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