You can take advantage of the rent a room scheme, if you rent your accommodation or if you own your own home. You will need to check that renting a room doesn't contravene your rental agreement or mortgage provider's terms and conditions.
Here are some general guidelines about choosing a lodger:
- Use a credit checking service such as Experian or Exquifax
- Obtain references for your prospective lodger (bank or building society, employer, previous landlord).
- Interview prospective tenants - find out about likes and dislikes; how much time they'll spend in the house, are they shift workers? How they spend their evenings; and explain house rules. (smoking, visitors etc)
- You should inform your insurance company that you are letting a bedroom and check if you need any additional cover.
- Draw up a written agreement of terms and conditions. You should include: rent amount and payment details; which rooms/facilities the lodger is able to use; any services you will provide; how household bills are apportioned, house rules and notice period. This will help if there are any problems in the future.
- It is advisable to ask for a deposit of one month's rent in advance. This can be used in the event of any unpaid rent/bills or in case any damage is caused to the property.
- If you are claiming Single Person Discount on your Council tax, you will need to inform the department of your change in circumstances.
- You will need to inform the Tax Office if you earn over £4250 per year from your lodger.