Taking on a lodger while on UC - Is the £7500 taxfree scheme relevent?

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ScaredFuture

Hi,

Is the £7500 per year tax-free rent-a-room scheme relevent for someone on UC with a disability and does not work.

Let's say someone in those circumstances recieves a gross of £8000 per year from the lodger, what are the deductions that need to be made for the reciever/landlord on UC?

Does the extra £500 need to be taxed? does something need to be taken off the UC payments? or does nothing at all need to be changed as that extra 500 comes under the personal allowance?

Obviously there is no income other than the lodger as the person claiming UC does not work, just recieves UC with LCWRA element and possible SDP transitional element.

Any guidance much appreciated.

calcotti

The tax free scheme is irrelevant for UC. Income from a lodger is ignored for UC anyway. However the lodger is also ignored when calculating the number of bedrooms you are entitled to when calculating the relevant LHA rate or whether he ‘bedroom tax’ applies.