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Lodgers and the bedroom tax
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Posted by: petewebb, on 19/07/2013, in category "General news & articles"
Views: this article has been read 207095 times
Summary: Is taking in a lodger the answer?



The new rules about under-occupancy (having more bedrooms that you need) that came into effect on 1st April 2013 will have an impact on the housing benefit of those affected.

Under-occupancy means that if you have one spare bedroom, you will receive 14% less housing benefit and 25% less if you have two or more spare bedrooms.

A possible solution to making up the difference is to rent your spare room to a lodger.


What is a lodger?

A lodger is somebody that lives in your home with you (usually in return for a payment). They may have their own room, but do not have a key to the room and do not have exclusive access to any part of the property. If you wish to take in a lodger then you must first obtain written permission from your landlord. This means that the room wouldn’t be treated as unoccupied and you wouldn’t lose housing benefit.


How will it affect my benefits?

 Income received from a lodger will have an effect on other benefits. However, the first £20 of weekly income from a lodger is ignored and won’t affect your benefits. Currently, if you provide meals for your lodger, 50% of anything over the £20 is also ignored.

Once Universal Credit is implemented (between October 2013 and 2017) the rent from a lodger will no longer be treated as income. This will make taking in a lodger a more attractive option, however you will still need to inform the Council of your change in circumstances. Visit your local Citizens Advice Bureau for more information with regards to your personal circumstances.


If you let furnished accommodation to a lodger, you’ll be eligible to keep the first £4,250 of rental income per year tax free, under the Rent a Room Scheme. Because the income is tax free, it won’t affect the amount you receive in Child Tax Credit or Working Tax Credit.

For more information, visit


Some things you need to know.


Always check with your landlord and obtain written permission before taking in a lodger.

Check with your benefits agency about how a lodger may affect your benefits.

If you have home contents insurance, your lodger would not be covered and would have to insure their own belongings if they required insurance.

The room needs to be furnished if you want to utilise the Rent a Room Scheme

If you set a rent in excess of £4,250 per year, you will have to inform your tax office.

Interview lodgers in person before accepting them and make sure they can pay the rent. 

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