Meg Saksida points out details on the rent-a-room scheme that some might not know.
The rent-a-room scheme was introduced in 1992 to relieve the housing crisis in the UK by allowing beneficial tax calculations for property owners (or indeed tenants) receiving income from allowing lodgers to use furnished accommodation inside the taxpayer’s main residence.
The legislation is set out in ITTOIA 2005, ss 784-802.
Benefits of the rent-a-room scheme
1. Gross income from lodger is under £7,500
The scheme enables these taxpayers freedom from reporting anything to HMRC. The rent-a-room scheme applies without the requirement for any claim or election for these landlords, and up to £7,500 costs are automatically deducted as expenses;
