If you let a furnished room out in your house, you could be better off using the "rent a room" scheme. 

This scheme allows you to receive £4,250 tax free per year. The limit is £2,125 if the room is let jointly. The income used in the calculation is the gross income - ie before any expenses are deducted.

The scheme applies if the lodger has a whole room or whole floor in your house, but not if the house has been divided into separate dwellings - eg flats.

If you are considering using the rent a room scheme and would like some assistance, please contact Harrisons Accountants.