Published 6 November 2026 · Illustrative examples
What the numbers tell us
A lodger paying £750 per month for twelve months generates £9,000 gross receipts.
Costs and restrictions to consider
If utilities increase by £110 per month and cleaning and other costs by £40, incremental cash flow is £7,200 before tax. Cash flow and taxable income are different concepts.
Try your own numbers
Use the free calculator to explore how your result changes with different prices, occupancy and running costs. Treat any attractive projected income with caution until you have checked local comparables and legal conditions.
Source for tax rules: GOV.UK Rent a Room Scheme.
What happens if you have two vacant months?
At £750 a month for ten occupied months, annual gross room receipts are £7,500. If additional bills and other costs total £150 per occupied month, the illustrative annual incremental cash flow is £6,000 before tax. That is £1,200 less than twelve occupied months under the same assumptions.
What the calculation cannot tell you
A cash-flow estimate is not a determination of taxable profit or eligibility for Rent a Room relief. The standard £7,500 threshold concerns qualifying gross receipts, and a £3,750 shared-income threshold may apply. Consult official HMRC guidance before relying on tax treatment.