Most people have a room in their home that is stacked up with ‘just in case we need it’ stuff that they can’t bear to throw away.That wasted space is costing you money because if the room was cleared out and let to a lodger, you could earn up to £4,250 a year rent and pay no tax.Just think what you could do with an extra £80 a week if you are having a tough time making ends meet in the recession.
This is how the cunning plan works:
- You box up all your stuff and take it to a self storage centre and rent a small room that will probably cost less than a tenner a week.
- Spruce up the room with some fresh paint and clean the carpet.
- Advertise for a lodger on the web – somewhere like Gumtree, in a local paper or by sticking a card in the post office window.
- Once you find a lodger you can live with, charge them no more than £81 a week rent – that’s £351 a calendar month.
- Pay the bill at the self storage and pocket the rest and spend the money how you want.
As long as you do not earn more than £4,250, the income is tax free under the Rent-A-Room-Scheme and you do not have to tell the taxman.
Some warnings –
- If you are married or living with a partner, the tax-free cash is split between you so you can each earn £2,125 tax-free.
- You must live in the property as your main home where you are letting the room.
- The room you are letting must be furnished.
- You cannot let out the room as a permanently divided self-contained flat or bedsit.
That’s what most people would call a result – money for nothing just for tidying out a room and putting your belongings in to self storage with a net result of about £70 a week profit.