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 to £3,750 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.