Rent a Room Relief

The Rent a Room Scheme allows owner-occupiers and tenants to receive tax-free rental income if you provide furnished accommodation in your only or main home.

For the tax year 2019 to 2020, the annual Rent a Room limit is £7,500. This reduces to £3,750 if someone else receives income from letting accommodation in the same property, such as a joint owner. The limit is the same even if you let the accommodation for less than 12 months.

If you would like more information, please contact us today! You can call 01707 871622, or complete the short form below and we’ll get back to you shortly.

An election should be made to apply for rent a room relief. You could elect to dis-apply the rent-a-room income treatment and instead treat the income as normal rental income. It is a matter of tax planning as if a loss has occurred due to a rent a room activity; that loss could be offset against any other property income in the year.

Or if the rental income from rent a room activity is above the relief amount of £7,500, then election could be made to be taxed on an additional income. However, no further expenses would be allowed.

You usually count your gross receipts for a tax year – that’s from 6 April one year to 5 April the next. However, if your letting activity amounts to a trade, you count your gross receipts for your basis period.

For further information about rent a room relief, please visit the government’s website.