Money News

Take in a lodger for Wimbledon, Test Matches and 2012 Olympics

By Martin Fagan - news@consumerchoices.co.uk

Homeowners can earn £4,250 a year tax free by renting out a spare room to either full-time lodgers or temporary sports fans.

Homeowners who live near key sporting venues could rent out their spare rooms or offer temporary bed & breakfast to spectators who find they’ve left it too late to book hotels.

By taking advantage of the government's Rent a Room scheme, people with a spare bedroom can earn up to £4,250 per year without paying any extra tax, the Institute of Chartered Accountants of England & Wales (ICAEW) has said.

Although the scheme is aimed at homeowners taking in long-term lodgers and the £4,250 allowance is an annual one, the ICAWE said there is no reason rooms can’t be let to sports fans on a very short-term basis as long as the rent received doesn’t exceed the allowance in any one tax year.

During Wimbledon fortnight, many residents of SW17 rent out rooms - in some cases, entire floors - to the lower ranked players and charge around £1,000 per week.

But spectators who follow Test Matches and Six Nations Rugby around the UK can also be accommodated in spare rooms with the rate negotiable between homeowner and sports fan.

"The Rent a Room scheme provides a welcome tax break to help you maximise your income without incurring tax,” said Anita Monteith, ICAEW's tax faculty's technical manager. “Major sporting events such as Wimbledon and the Olympics next year are perfect opportunities to participate in the scheme.”

As the Olympics draw near and with most hotels in the greater London area already fully booked, many ticketholders planning to travel to the Olympic events are without accommodation.

As a result, many websites have sprung up to make it easier for people to rent rooms from homeowners.

But although Rent a Room can provide an easy additional income, Monteith warned: "If you use the scheme, you cannot also claim any expenses relating to the letting, for example, wear and tear, insurance, repairs, heating and lighting.

“You may also need to call your insurer and arrange some temporary liability cover which will protect you against accidents and injuries when someone is staying in your home.”