If you live in a town centre or near a train station or sports ground, renting out unused parking spaces could be just the ticket to supplement your income.

There has been a bit of controversy around the idea recently with reports that local councils want to start charging a £385 license fee to anyone who rents out a spare parking space.

Communities Secretary Eric Pickles has spoken out against local council bosses looking to make easy money from residents: “Councils shouldn’t be interfering in an honest activity that causes no harm to others, unless there are serious concerns. Parking charges and fines are not a cash cow for town halls.”

As it stands, it is currently within the law to rent out one parking space as long as it isn’t a nuisance to your neighbours – although Government guidelines have been criticised as unclear.

If renting out your parking space sounds up your street, Judy Niner, founder of www.mondaytofriday.com, a website connecting people with free rooms and parking spaces to renters, offers the following tips:

Produce a written contract

This will include details on rent (amount and how and when to pay) as well as terms and conditions of use (damages & notice period for cancelling the contract). The agreement should also cite that the landlord is not responsible for the vehicle or items inside the vehicle.

Notify neighbours

Local councils have tried to tell homeowners they will need a £385 planning application fee to rent out a space – which isn’t true.

Renting out one parking space without planning permission is within your rights as long as it doesn’t cause nuisance to neighbours. If you speak with them in advance you can ask if they have any requests or concerns.

Fill in a tax return

Income from renting out a driveway is taxable and therefore you will need to declare the earning to HMRC. Phone or write to your tax office for further information and consider setting up a separate bank account to easily monitor how much you’re earning.

Don’t charge too much, or too little

Take a look at the prices to park elsewhere in the immediate competing area and charge a fair price. Remember to add in the cost of advertising when working out how much you want to make.

Meet with long-term tenants

If you’re agreeing to have a tenant on a long-term agreement it is best to meet with them to establish you can provide what they need. You should also consider asking for a deposit or the first month upfront – the deposit should be included in the written agreement.