If you rent out a furnished room in your only or main home, then you can earn up to £7,500 a year (which works out as £625 per month) tax free.

If you share the income with a joint owner of the property, then you each get half the allowance, £3,750 per year.
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If you earn less than £7,500
To make things simple, the is an "automatic tax exemption" which means if you earn under the £7,500 (or £3,750) threshold, you don't need to include it on your tax return. 

If you earn more than £7,500
However, if you earn over the threshold, then you need to declare this income on your tax return. If for example, you earn £10k from renting out a room in your house, then you can either:

Depending on how big your expenses were for the year, it will usually be best to claim the £7,500 allowance.

You usually work all this out based on the tax year which runs from 6 April to 5 April.
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As a sole trader
If you have a business account (for your sole trader business) connected to Coconut, you can put these amount through, but make sure you categorise them as "Personal" so that they don't count towards your taxable self-employment income.

You might want to add notes to these transactions so that you can identify them later.

Alternatively, pay this income straight into your personal account, rather than your business account (we'd recommend doing this so that you keep your business account relating only to your business transactions).

As a limited company
​If you run a limited company, then making non-business payments into your business account will make things messy and complicated - get your rental payment paid into your personal account.

As a dedicated account for rental income
​If you're using a sole trader business account as a dedicated account for rental income (and you don't have a self-employed business), then bear in mind that the tax calculation is designed for self-employed sole traders, so won't be accurate for a property rental business nor Rent a Room Scheme. 

However, Coconut will work just fine to keep your income and expenses recorded accurately through an account that's separate from your personal account.
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There's plenty more on the Rent a Room Scheme on the Gov website. Note that if you don't qualify for the Rent a Room Scheme, for example because you're actually renting a second property, or because you're renting your UK property while you're abroad, then check out Gov's guidance for Landlords.