Letting out rooms in my house

[admusker]

Hello.

I have two empty bedrooms in my house that I am considering renting out to help with my mortgage. I have been searching the internet and this website for information that is useful for my situation but I am finding it difficult to locate. Is there anyone here that could offer me advice, or link me to the relevant articles (I am sure they are here, I just can't seem to see them!)?

What I'd like to know are what I assume are the basics:

Legally, how does it affect the situation if I live in the house? I gather that I do not need to convert to a buy to let mortgage as I'll still be living here, does this change depending on the amount of people in the house? I have two reception rooms, one of which could be an extra bedroom.

Do I need to declare the income? Is it taxable?


Thank you very much.

[Cloud]

I do this, the bank set up a separate account for the lodger income to go into, which makes keeping track of payments and how much tax to pay, easier. The government has a scheme called the rent a room scheme and you can earn so much from lodgers per year, tax free. My mortgage company were fine with it but the insurance company increased the premium and advised me to get refs. I contacted the council and my council tax increased too. I got an advice email leaflet thingy from spareroom.co.uk

[Telometer]

Anything above £4,250 is taxable. N.B. if you charge extra for electricity etc. then that goes against the £4,250.

e.g. Annual rent, £5,000. Total for electricity and telephone £250. Total receipts £5,250; tax free £4,250, therefore tax payable on £1,000.


Mind you get a gas safety certificate if you have gas.

[craigfer]

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804