Help Make Ends Meet By Offering A Room To Let

It is a sad fact of life, but nothing is 100% certain. Unfortunately, we sometimes have to deal with a traumatic change, such as a relationship finishing or a job loss. Both of these can cause both emotional and financial hardship - especially to people left struggling to make ends meet.

One solution that for those facing financial hardship may want to consider is offering a spare room to let to a student or young professional. The welcome income that comes from offering a spare room to rent can make all the difference to a cash-strapped homeowner or tenant.

Plus, if the spare room to let is in your home and fully furnished it should qualify for the Government's Rent a Room Scheme. Through this Scheme a homeowner or tenant can currently earn up to £4,250 of rental income tax-free, although they will need to pay tax on any rental income above this threshold.

How the Rent a Room Scheme works

The Government's Rent a Room can be of help to homeowners and tenants that want to take in lodgers and boost their income. Here are the Scheme's main rules:
• The room to let must be fully furnished and part of your main residence.
• A separate self-contained flat will not qualify as part of the Scheme.
• You don't have to be the homeowner to take advantage of the Rent a Room Scheme. A tenant can also take advantage of the scheme providing they have the landlord's consent.
• You can offer a room to rent in either a flat or a house, providing that it is fully furnished and part of your main residence.

Income tax and the Rent a Room Scheme
Whether you'll benefit from offering a room to rent under the Rent a Room Scheme will depend on your particular circumstances. Bear in mind that if you offer a room to let in your home under the Scheme you can't claim expenses, such as utilities bills, repairs, council tax or insurance.

So, before you decide to opt into the Scheme with your spare room to rent you should look at all your expenses (including council tax) and the total rental income to see if you are better off in or out of the Scheme.

If your costs are fairly hefty, then you may be better off declaring all your rental income and claiming your expenses, so that you are only taxed on the net income.

If you don't usually file for income tax and decide to opt into the Scheme, and your income is below the tax threshold (currently £4,250) the income tax exemption will be automatic and won't require any actions on your part.

If want to opt in and the amount you earn is above the tax threshold, you will need to inform your tax office. This can be done by filing in a tax return and claiming the tax-free allowance.

If you think you are better off claiming expenses you can opt out of the Scheme by simply completing a tax return, making sure you declare all the earnings and expenses from renting your spare room on the relevant pages.

If you are finding it hard to make ends meet because of a change in your circumstance, becoming a live-in landlord through the Rent a Room Scheme may be a good way to help get a bit of extra income to help pay the household bills. Offering a spare furnished room to rent may give you that financial cushion you need.

For more information about marketing rental property contact to vibha@u-rooms.com or to list your property contact u-rooms.com

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