Do you find that your household costs’ are spiralling and you are struggling to meet your payments, how do you feel about having up to an extra £4250 per year tax free?!

Often people ponder over their budget and look at the areas they can cut back. How about getting rid of those spare boxes and having a good old spring clean and then renting that spare room out?

There is a government tax free scheme, called The Rent a Room Scheme, which allows you to have an income of up to £4250 per year tax free. Anything over this amount would have to be declared.

What could you do with an extra £354 every month? Clear those credit cards, pay off those priority arrears? Or even save for that well earned break.

Some of the Advantages of the scheme include:

ü      Earn an extra income without working extra hours

ü      A house sitter on hand to water those plants and feed the cat when you’re not around

ü      Extra money to clear your debts and get your finances back on track

ü      You would be able to claim expenses for utility bills and house insurance if you go over the allocated £4250 per year.

If all the above sounds like a good idea, then you also need to consider the down side of letting a room. If someone else’s dirty pots and smelly socks is enough to send you round the bend, you may want to set ground rules from the start, this may save a lot of tension further down the line. Things to consider could include smoking, pets and general tidiness.

If you still like the sound of the extra cash and don’t mind sharing your home, you will need to ensure there is an agreed notice period to end the agreement and also make an inventory of all the room contents. You will need to agree what the rent covers as well as date and method of payment.

If you would like further information, please click on this link that will take you to the Direct Gov website.