Did you know you can earn tax-free cash from renting out a room in your home?
The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation.
You can let out as much of your home as you want, but the £7,500 threshold will be halved if you share the income with someone else.
“You don’t need to do anything if you earn less than the threshold, the tax exemption is automatic,” said Peter Way-Rider, tax manager at Ellis & Co.
“If you earn more than the £7,500 threshold you will need to complete a tax return and opt in to the scheme to make your claim.
“If you do not want to opt in to the scheme but still wish to make a claim you can record the amount in the income and expenses property pages of your tax return.”
You can opt in to the scheme at any time if:
- You are a resident landlord, whether or not you own your home
- You run a bed and breakfast or a guest house
You cannot use the scheme for homes converted into separate flats.
For further information on this or any other tax matter contact Peter Way-Rider on 01244 343504.