[rɛnt ə ruːm skiːm]
The Rent a Room scheme allows homeowners to have a £7500 a year tax-free allowance for rental income earned from renting a part of their primary residence.
The Rent a Room scheme is a UK government initiative that allows homeowners to earn up to £7500 a year tax-free by letting out furnished accommodation in their home. The home must be their primary residence.
The amount of tax-free allowance halves if the homeowners shares the income with a partner or someone else.
For the 23/24 taz year, if the rental income is less than £7500, it is not required to report it to HMRC. If it is greater than £7500, it must be included in a Self Assessment but the allowance still applies.
The scheme might not be the most tax-efficient outcome as it is not possible to claim certain Expenses or other allowances while in the scheme.
There are loads of different tax laws in the United Kingdom. IR35 is very important to freelancers and contractors but can be a little confusing. Here, we explain simply what IR35 is and who it can affect.
Read moreSelf-employed individuals can use two different methods to expense business vehicle costs. Here, we investigate the positive and negatives for both methods and which one might be right for you.
Read more