[rɛnt ə ruːm skiːm]
The Rent a Room scheme allows homeowners to have a £7500 a year tax-free allowance for rental income earned from renting a part of their primary residence.
The Rent a Room scheme is a UK government initiative that allows homeowners to earn up to £7500 a year tax-free by letting out furnished accommodation in their home. The home must be their primary residence.
The amount of tax-free allowance halves if the homeowners shares the income with a partner or someone else.
For the 23/24 taz year, if the rental income is less than £7500, it is not required to report it to HMRC. If it is greater than £7500, it must be included in a Self Assessment but the allowance still applies.
The scheme might not be the most tax-efficient outcome as it is not possible to claim certain Expenses or other allowances while in the scheme.
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