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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)

http://www.hmrc.gov.uk/manuals/tcmanual/TCM0120160.htme

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 www.spareroom.co.uk.

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

thank you

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

Try Easyroommate.com

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