I'm in the process of buying a two bed property and have a few friends interested in renting out the spare room.
Looking into it, it seems this would be taxable income though there is the rent a room scheme which comes to about £350 a month.
Living just outside London the going value of a room to rent in my area is higher than this but I'm unsure if it's worth charging more.
I currently sit at around £30k salary with, usually, a 30% yearly bonus. With the income from the rent there is a chance that if I charge more I'll put myself into the higher rate of tax.
With this in mind, can anyone advise what the best way of approaching it is?
- Should I just stick with the £350 untaxed rental income?
- Is it possible to have the lodger-friend pay the internet bill to make up the difference? Or is that taxed also?
- Is it worth just charging more and dealing with the tax implications?
- Would a partner contributing to bills be taxable income?