Rent a room relief 2019-20

Tax Diary August / September 2019 | Rent a room relief 2019-20 | Accountants in Parracombe | Accountants in Abbots Bickington | Accountants in Puddington | Accountants in Bradworthy | Accountants in Kingskerswell | Accountants in Little Torrington | Accountants in Northam | Accountants in Buckland Ripers | Accountants in Barraston

Rent a room relief 2019-20

Topic:-Rent a room relief 2019-20

The rent-a-room scheme is a set of special rules designed to help homeowners who rent-a-room in their home. The current tax-free threshold of £7,500 per year has been in place since 6 April 2016. If you are using this scheme you should ensure that rents received from lodgers during the current tax year do no exceed £7,500. The tax exemption is automatic if you earn less than £7,500 and there are no specific tax reporting requirements.

The relief applies to the letting of furnished accommodation, for example, when one bedroom is rented out in a furnished house to a lodger. This process is becoming more widely adopted as more home owners rent out rooms online. The relief also simplifies the tax and administrative burden for those with rent-a-room income up to £7,500. The limit is reduced by half if the income from letting accommodation in the same property is shared by a joint owner of the property.

The rent-a-room limit includes any amounts received for meals, goods and services provided, such as cleaning or laundry. If gross receipts are more than the limit, taxpayers can choose between paying tax on the actual profit (gross rents minus actual expenses and capital allowances) or the gross receipts (and any balancing charges) minus the allowance – with no deduction for expenses or capital allowances.

For more information on Rent a room relief 2019-20, Book a Free Consultation

 

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