If you’ve a spare room in your home, the Government’s Rent-a-Room scheme could be an extremely tax efficient way to boost your income.
The scheme allows you to earn up to £7500, tax-free per year and it’s completely legal, regardless of your personal income tax bracket, simply by taking a lodger into your home.
Designed to encourage homeowners to make better use of underutilized space, it can turn your spare bedroom into a profitable asset, provided it’s furnished and within your main residence. Unfurnished rooms do not qualify.
The qualifications to apply for Rent-a-Room are simple and generous: it must be your main residence – if you own and live in the property you are considered a resident landlord: even if you are a tenant, you can still qualify, provided the landlord you are renting from expresses written permission.
Check it out: https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme
Source: Daily Telegraph Money section, July 5th 2025
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