Rent out room profit can change your life – it can mean that you have a second stream of monthly income, enabling you to have peace of mind and greater financial security. But, you may be wondering how this impacts any tax credits or benefits you receive at present. Read on to find out more.
What about income tax? If you are a taxpayer, the good news is that the first £7,500 you receive per annum is tax-free. This is part of the ‘Rent a Room’ scheme that you must usually opt-in to. The tax-free amount has risen several thousand over the past few years, making it an attractive proposition for anyone who wants to rent a room out. One thing you do need to be mindful of is that your council tax may increase when taking on a lodger. This is only the case if you currently live alone, as this means you are receiving a 25 per cent single person discount at present. You lose this discount once you take on a tenant. However, there are a few exceptions, so it is certainly worth exploring this further. For instance, if your lodger is a full-time student, you may still receive a deduction on your tax bill.
As you can see, renting out a room profits often far outweigh any impact to benefits and tax credits, and in some cases, there is no impact at all. If you would like to start making some more money each month, all you need to do is head to Bellrooms Ltd, https://www.bellrooms.com/, to list your advert immediately.