01202 022992
contact@balloonaccounting.co.uk
BH12 1PN, Poole, UK

What is the Rent-a-Room Scheme

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home.

The current tax-free threshold of £7,500 per year has been in place since 6 April 2016.

The relief only applies to the letting of furnished accommodation and is used when one bedroom is rented out in a furnished house to a lodger. The relief is being applied more widely as more people rent out rooms online. The relief also simplifies the tax and administrative burden for those with rent-a-room income up to £7,500.

The limit is reduced by half if the income from letting accommodation in the same property is shared by a joint owner of the property. The rent-a-room limit includes any amounts received for meals, goods and services provided, such as cleaning or laundry.

If gross receipts are more than the limit, taxpayers can choose between paying tax on the actual profit (gross rents minus actual expenses and capital allowances) or the gross receipts (and any balancing charges) minus the allowance – with no deduction for expenses or capital allowances.

Please contact us for further information.

Disclaimer:  This App and its contents have been produced as a helpful reference point. The information should be used as a guide only and your specific circumstances are best discussed directly with us.

No reliance should be placed on this material and no action should be taken without seeking the appropriate professional or legal advice. Although the authors make reasonable efforts to ensure the content of this App is accurate and up-to-date, the authors make no representations, warranties or guarantees that the content is accurate, complete or up-to-date and accept no responsibility whatsoever for any loss occasioned by anyone acting on information within this App.

Category: Landlords
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