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

ScaredFuture
ScaredFuture Online Community Member Posts: 4 Listener
edited November 2022 in Universal Credit (UC)
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.

Comments

  • calcotti
    calcotti Online Community Member Posts: 10,000 Championing
    edited November 2022
    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.
  • ScaredFuture
    ScaredFuture Online Community Member Posts: 4 Listener
    Thank you Calcotti. Very helpful.
  • L_Volunteer
    L_Volunteer Community Volunteer Adviser, Scope Member Posts: 7,922 Championing
    You are welcome @ScaredFuture. It is the very least you deserve.

    Please don't hesitate to let us know if we can do anything else to support you. We are all here for you and listening to you  :)

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