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Rent a Room and Housing Benefit & WTC

Rent a Room and Housing Benefit & WTC

Is income received under the Rent a Room scheme taken into account when being assessed for WTC and Housing Benefit?

This lady rents a 2 bedroom flat


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07th Mar 2016 14:03

You mean, is it "income"?

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By DMGbus
07th Mar 2016 14:38

Helpful advice - rent a room income

Do you let a furnished room in your house to a lodger?

If so, the income may qualify for ‘rent a room' relief meaning that it is not taxable. Broadly the conditions to be met are:

your gross 'rent a room' income does not exceed £4,250 for the tax year, before the deduction of any expenses;the income arises from letting a room in your home (and not in business premises, for example);the income represents only letting income and income for providing associated services such as laundry, meals and cleaning; andthe income would otherwise be taxable.

If all of the above conditions are met, the income is exempt from tax and you cannot claim any deductions for related expenses. You do not need to do anything for the exemption to apply; it will apply automatically unless you ‘opt out’.

If the income is qualifying to be exempt from tax then it does not count towards income for Tax Credits purposes.

[The above quotes the historic income exempt amount, there is now an increased exempt income amount]

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07th Mar 2016 14:43

I think the increased rent-a-room limit does not apply until 2016/17, which is not NOW.

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07th Mar 2016 15:57

Yes the increased limit applies from April 2016.

Thanks for confirming rent a room income is not included when determining income for WTC purposes .. have now found that on HMRC's website too but thank you.

Can't find confirmation though of whether rent a room income might affect housing benefit claims? What do you think?


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07th Mar 2016 16:11

Income from sub-tenants

W2.550 For a definition of sub-tenants, see C1 Tenants and sub-tenants.

W2.551 It should be noted that in the case of a claimant on IS or Pension Credit, this calculation is not necessary since it will have been done already as part of the assessment of entitlement to IS or Pension Credit.

W2.552 When a claimant is a tenant with a sub-tenant, or an owner-occupier with a tenant, living in part of their home and there is a contractual liability to pay for the accommodation, the income  from each sub tenant has a disregard of £20.

W2.553 The £20 disregard is applied irrespective of whether the charge includes a payment for heating.

From this:

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