do i declare income for a lodger

A question about : do i declare income for a lodger

Hi,

I'm a tennant of a housing association and I have permission to rent a room in my house to a lodger.

I am not in the rent-a-room scheme.

The lodger pays Ј100 per week including council tax and utilitiy bills, which mean I get an income of Ј5200 (inc bills)

I've just seen on a lot of websites that I can only earn Ј4,250 a year tax free from this and have to declare the extra Ј950 to HMRC in a tax return.

Is this correct?

What about the proportion of the rent that's to cover utilities (Ј30 per week), can i deduct that before doing my calculation?

Thanks

Worried of Yorkshire

Best answers:

• It's either you claim all the expenses or you claim the Ј4,250 rent-a-room scheme allowance and no expenses.
  You can claim half (assuming there is 2 of you..i.e you and the lodger) of the rent, half the council tax, half the bills (water, electric, gas, phone line and broadband, tv licence, sky), half of any repairs and maintenance done during the tax year etc...that might come to Ј5,200...it may not. You do the calculation and figure out which one is better to claim.
• So, (sorry still a little fuzzy here), I charge him Ј100 a week.
  Of which let's say Ј50 is for utilities, broadband, council tax etc. which comes to Ј2,600
  Does that mean I pay tax on Ј2,600?
• You could and in that case you would choose to just pay the tax on the Ј950 which would be the better choice.
  Do you have a mortgage? Any service charges? Provide any food? You can claim for providing meals, toilet paper, milk, tea, coffee etc whether they choose to eat them, use it or not...if you provide it you can claim it as an expense.
• Hi HappyMJ thanks for the help here.
  I presume I have to be able to provide invoices, bills and receipts etc to justify 50% or does an agreement with the tennants suffice?
• Cheers,
  A final thought, can I apply retrospectively for this rent-a-room thing taking it back to April 2014 or is it effective only from the current date.
  If the latter I don't want to start it before April 2015 or I'll get Ј600 free and pay tax on all the rest.
  Also when do I have to do this by for the current tax year?
• I think i need to do a bit of maths on bills. thanks