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Will my tax credits go down if I get a lodger?

(8 Posts)
Maelstrom Sat 11-Jun-11 00:32:26

I'm struggling to cover the bills with my income, so I find myself a bit short of money at the end of the month.

I have been thinking of getting a lodger but wonder how much the tax credits will go down if I do.

Does anybody know how does this work?

Winnie300 Sat 11-Jun-11 19:52:24

It depends.................

For income tax purposes, there is an exemption where you rent a room in your house. If annual rents are at or below £4,250 per tax year and you claim the 'rent a room' exemption then you will not pay tax on those rents.

If you look at HMRC's Inspectors Tax Credit Manuel (link below)

you will see it says that income received under the rent a room scheme is disregarded for tax credit purposes.

To sum up, provided annual rents are below £4,250, it should not affect your tax credit award.

Hope this helps.

Maelstrom Sat 11-Jun-11 23:46:36

Thank you, that has been very very helpful.

TheNextMrsBuble Wed 15-Jun-11 14:10:10

I rent a spare room on a Monday-Friday basis to a professional female. It's nice company, the dosh is a HUGE help and at weekends the house is all mine and DS's again. Took a while of advertising to get a Mon-Fri person but I was determined I wanted privacy at the weekends. And as Winnie300* says, as the monthly rent is below £350 you're fine for tax purposes. Go for it!

Maelstrom Fri 17-Jun-11 21:59:04

That sounds like a very good idea, the question is how do I go about finding a Monday-Friday lodger? I do live in a small city.

TheNextMrsBuble Mon 20-Jun-11 08:42:01

I used

Maelstrom Mon 20-Jun-11 21:34:53

thank you

doinmummy Tue 05-Jul-11 18:58:38


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