Taking A Lodger? Don’t Forget To Claim “Rent A Room” Relief

HMRC are carrying out a review of rent a room relief to discover whether the scheme, introduced back in 1992 provides the right incentives for the rental market. The current scheme exempts from tax, gross rents up to £7,500 where rooms within the taxpayer’s main residence are rented out.

Most accountants that responded to the call for evidence were keen for the relief to continue as it encourages taxpayers to let out spare rooms and provides them with additional income.

Note that where the gross rental income exceeds £7,500, say £12,000, the excess of £4,500 would be taxable. Alternatively the taxpayer may deduct costs of providing the living accommodation such as a proportion of mortgage interest and light and heat. If these allowable expenses amounted to £9,000 then it would be more appropriate to be taxed on the net rental profit of £3,000.

Note also that the current scheme only provides relief where the rooms let are in the taxpayer’s main residence and if the property is jointly owned, the relief would be £3,750 each. Where the lettings are in another property, the new £1,000 property allowance could be set against the gross rental income, however this allowance applies to each taxpayer.

2018-05-01T16:38:07+00:00 May 10th, 2018|Tax|Comments Off on Taking A Lodger? Don’t Forget To Claim “Rent A Room” Relief

Free initial consultation

We offer unlimited access to all our team. This means that you can call on us at ANY TIME knowing that you will never be charged for our time. So we hope that you will feel free to speak to us whenever you need to, without having to worry about the cost.

If any extra work that arises from this FREE consultation for financial advice, we will give you a fixed price quotation for the extra work before it is started.

CALL US ON 0151 336 7375

Contact Info

Duncan Boxwell & Company Montrose House, Clayhill Park, Neston, Wirral, Cheshire, CH64 3RU

Phone: 0151 336 7375

Fax: 0151 336 3082

CONFUSED ABOUT TAX?
Subscribe To Newsletter
Get straight forward advice and tips
Stay Updated
Give it a try, you can unsubscribe anytime.
close-link
Get the best articles right in your inbox
Subscribe
close-image

Subscribe to our newsletter

Sign-up to get the latest news straight to your inbox.
SUBSCRIBE!
Give it a try, you can unsubscribe anytime.