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Sharing is caring… can it be earning and saving too?

Struggling for ways to get some extra cash? Well, have you got a car sitting unused during the week? Is your home empty when you’re on holiday? Does your pet pooch crave attention when you’re at work?

These are just some of ways people are making money from the “sharing economy”. And it can help bring down costs if you are looking for the short term use of a car, apartment, driveway, dress or even a dog.

It’s not just about things either - couriering, lift-sharing and cleaning are some of the services you can share too.

Which city has the most places to stay listed on home sharing site AirBnB? London or Paris?

Paris tops the list with more than 40,000 homes available. London has around 23,000. (source AirBnB)

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How does the sharing economy work?

There are a growing number of websites and apps to help you loan out your home, car and more for some extra cash. In most cases you’ll pay a fee for connecting you to people who want what you have, and are willing to pay you for its temporary use.

There are some sharing services which are really about swapping, or lending for free. Though you might not make money this way, it could save you shelling out for expensive items yourself.

So you might be able to borrow some tools for weekend DIY, or perhaps snap up an unwanted sofa.

Make sure your home, car or more are insured if you lend them out

There are risks if you’re thinking of joining up and putting your property or vehicle on a site like AirBnB or Zip Car, so the right insurance is important.

You’ll need to make sure your insurance company will cover you for letting strangers rent your home or car. If they do, check your policy covers all eventualities.

If it doesn’t, you might find it easier to go via an insurance broker instead of combing through the terms and conditions of every policy on a comparison site. It won’t cost you any more to do this – they’re paid a commission by the insurance provider, in the same way a comparison site it.

Home owners also need to talk to their mortgage provider as some may have conditions that stop paying guests.

Don’t forget to declare any extra income you make

If you’re making regular money from these services, you’re essentially running a business. This means any money you earn needs to be declared to HM Revenue and Customs in a tax return. How much tax you’ll pay depends on your total income for the year.

However, renting a room in your house comes with a handy tax-free allowance. That currently stands at £4,250 a year, but jumps up to £7,500 next April.

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