Selling hosting to a friend - any possible implications?

Hi there :) I have a friend who wants to host their website on my server as I have a VPS that runs all of my websites on there generating passive income from Adsense. Of course the money that comes from boils down to my Google rank and I was wondering if having too many sites coming off one IP/server could negatively affect them? I'm also wondering how that income works, do I just put it alongside my normal income, or does it come off as tax free because the server will cost more than I will make from him? He's mentioned use a tax calculator and sent me to www. .uk/ but I haven't found it much use so far. Any ideas for either question would be super helpful!
Thanks :)
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