The Rent a room scheme was one of the best ideas from the previous or indeed any government and has been around since early 1992 if I remember correctly.

I used it back in the Nineties when I bought my first house and it has become hugely popular with this recession/credit crunch. With the rises in rents over the last 19 years I think the £4250 tax free limit should be raised, room rents in London (Tube Zones 1,2 and 3) must be far more than this now.

sunny - Have a careful read of the link below from Directgov, it explains in detail all the requirements of the rent a room scheme.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/TaxOnPropertyAndRentalIncome/DG_4017804

Dear sir,

I am working in a small orgaisation and my husband is unemployed.
As we have a high mortgage and we don't get any benefits as we are not british.
We have rent a room in our house, do we have to pay tax on the rent income this rent income is 280 pounds. Also i wanted to know the lodger transfers the money online , will in future bank or the HMRC will question about that money and ask about the tax. What do we need to do.
In that case is it better to take cash.
Please give your valuable suggestions.

Thanks
sunny