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How the Rent a room Scheme works.

The rent a room Scheme is an optional scheme that lets you receive a certain amount of tax-free ‘gross’ income (receipts before expenses) from renting furnished accommodation in your only or main home. The rent a room scheme.gov

 

Do you have to be a home owner?

No. You can choose to take advantage of the Rent a Room scheme, regardless of whether you are a home owner or are renting your home. However, if you are renting, you should check whether your lease allows you to take in a lodger. If you're a mortgage payer it's best to check whether taking in a lodger is within your mortgage lender's and insurer's terms and conditions

 

Who can take advantage of the scheme?

You can choose to take advantage of the scheme if you let furnished accommodation in your only home or family home to a lodger. A lodger can occupy a single room or an entire floor of your home, however, the scheme does not apply if your home is converted into separate flats that you rent out. In this case you need to declare your income to HMRC, and pay tax in the normal way. Nor does this scheme apply if you rent unfurnished accommodation in your property.

 

If you share a home and both let a room or rooms.

If you are jointly letting furnished accommodation in a shared home, you will each be entitled to fifty percent of the allowance (up to £2125 in the 2008/2009 tax year) without the need for paying tax.

 

Quicklet only offer to provide guidelines only. Full details can be found on the government and Peterborough City Councils websites. Quicklet have tried not to deviate from the scope of these web sites. If you have any queries please do not hesitate to call us.