Rent a Room Scheme UK may be something you have heard about, yet you may not be fully aware of what it entails. This is a tax relief scheme for anyone that rents out a spare room in their home. For more information about what this means for you, read on.
To qualify for the Rent a Room Scheme, you must rent out furnished residential accommodation in your main home. This relief is not applicable to any type of accommodation that is let for business purposes. At present, you can make up to £7,500 each year tax-free. If the income from the property is shared with someone else, you get up to £3,750 each tax-free. By going down this route, you cannot deduct expenses, and it is important that anything your tenants are charged for such as laundry, cleaning, and meals, is added to the rent received when you are calculating your gross rents. If you do make over the £7,500 limit per year, you need to pay tax on anything beyond this. The scheme is the preferred option for most people; however, there are cases when it is better to opt out. For example, if you find it is more profitable to be taxed in the normal way because you can claim for expenses, then you can opt out of the scheme. It is not compulsory. If you do earn over the threshold, you have two options, you can either pay tax on your gross income less the £7,500 limit with no expenses allowance, or you can pay tax on your profits the normal away, i.e. from your actual profit once expenses have been deducted.
Now you know more about the how to find room for rent or Rent a Room Scheme UK, you can find the perfect tenants for you at Bellrooms Ltd, https://www.bellrooms.com/. Or, if you are looking to find room for rent, you can also rely on our easy, effective service that is free for now.