'Our vision is to become your partner and understand your business, your finances, your business problems and your aspirations'.
logo
topphone

When you let rooms in your own home as residential accommodation, you can receive the rent tax-free if it falls within the limits for rent-a-room relief. This relief is currently capped at rents of £7,500 per year. Where more than one person receives the rent from the property, each person has a tax-free exemption for rent of £3,750.

The conditions for rent-a-room relief stipulate that you must occupy the property as your main home – this relief can’t cover income from a holiday home or buy-to-let property. Also, the accommodation must be used for residential purposes, not as an office.

If you let out land or buildings which don’t qualify for rent-a-room relief, such as a store room, office, or even your driveway, the income could be covered by the £1,000 property income allowance. You can’t use this allowance against rent paid by your own company, a company you work for, or one which your spouse is associated with.

If either rental income exceeds the relevant limit, it must be declared on your tax return, along with any related expenses. However, the relevant limit may be claimed as deemed expenses, if this is higher than actual expenses.

Action Point!
Can you claim rent-a-room relief or the property allowance?

  • icaew firm logo black
  • foot logo2
  • AA10793 Stockport Business Awards Logo 2019 horizontal

 

 

 

 

 twitter      orange linkedin 256      Facebook

 

Save

Save

Save

Clarke Nicklin House, Brooks Drive, Cheadle Royal Business Park, Cheadle, Cheshire, SK8 3TD. Registered Number OC309225.
The firm is registered to carry on audit work in the UK & Ireland. Details about our audit registration can be viewed at www.auditregister.org.uk under reference number C001178544. The professional rules applicable are the Audit Regulations and Guidance which can be found at www.icaew.com/regulations, and the International Standards on Auditing (UK and Ireland) which can be found at www.frc.org.uk/apb/publications/isa.cfm.