If you rent out a room out of your property, then you should be aware that you may be able to claim tax relief. To find out more information please continue to read our blog below.

What do I need to know?

If you rent out a spare room in your property through Airbnb, then you may be able to claim £7,500 tax-free rental income through the rent-a-room scheme.

What is rent-a-room relief?

Rent-a-room relief allows individuals to earn up to £7,500 a year tax free from letting out rooms in their own home.

To be eligible for relief the property must be the individual’s only or main home.

You should be aware that the limit is halved if more than one person will benefit from the income. So, this means that each person can enjoy a rental income of £3,750 per year tax free.

Who is eligible?

You should be aware that only the owner and tenants of the property can qualify for relief.  

If you have a lodger, run a guest house or offer a bed and breakfast service, then you would still qualify for relief.

If your gross rental income is less than £7,500, then you will automatically get relief – so there is no hassle of trying to get through to HMRC to claim relief.

What if my rental income is above the limit?

If your rental income is above the rent-a-room limit, then it may be beneficial to:

  • Deduct the rent-a-room limit and pay tax on the excess, or
  • Calculate the profits in the normal way by deducting the actual expenses

What are the exemptions?

You cannot claim rent-a-room relief when:

  • Accommodation is not in the individual’s main home
  • Accommodation is provided unfurnished
  • Where a UK home is let out while the owner is working abroad

If you use Airbnb or a site similar to advertise letting your property, and it is not your main home, for example a holiday home, then this is not eligible for rent-a-room relief as normal property rental rules will apply.

Although, don’t despair as you may also benefit from the property income allowance of £1,000.

Further Actions

You should make sure that you find out what tax relief you are eligible for when renting out a room from your property.

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