Does the Rent a Room Scheme apply to Airbnb lettings?

Full answer

The Rent a Room Scheme allows you to earn up to £7,500 a year tax-free (£3,750 each if you share the income with a partner or another joint owner) from letting furnished accommodation in your only or main home, and this can include short-term lettings arranged through platforms like Airbnb, provided the core conditions are met. **Core conditions for Airbnb income to qualify** 1. The accommodation must be in your only or main residence -- not a second home, buy-to-let, or wholly separate self-contained annexe. 2. The room or rooms must be furnished. 3. You must be living in the property as your home during the letting (you do not need to be present every single night the guest stays, but the property must remain your main residence throughout). **What does NOT qualify** If you let your entire home on Airbnb while you go on holiday yourself (i.e. you are not there and it is not simultaneously your residence during that period), that income does NOT qualify for Rent a Room relief -- it is taxed as ordinary property income instead, though the £1,000 property income allowance may apply if income is low. Similarly, a self-contained annexe with its own entrance, kitchen and bathroom, let separately from the rest of the house, generally does not qualify because HMRC treats it as a distinct dwelling. **Worked example: qualifying Airbnb income** Sam lives in his three-bedroom house and lets the spare room via Airbnb to short-stay guests most weekends while continuing to live there himself. He earns £6,200 in the tax year. Because he is genuinely living in the property throughout and letting a furnished room within it, this qualifies for Rent a Room relief and the full £6,200 is tax-free (under the £7,500 limit). **Worked example: income exceeding the threshold** If Sam's Airbnb income for the room had instead been £9,000, he could choose between: (a) the simplified Rent a Room method, paying tax on £9,000 − £7,500 = £1,500 with no expense deductions, or (b) the standard property income method, deducting his actual expenses (cleaning, laundry, a share of utility bills) from the full £9,000 -- whichever produces the lower tax bill. **Reporting** Even when the income is fully covered by Rent a Room relief, if you already file Self Assessment for other reasons you should still declare the income and claim the relief on the return; if Self Assessment is not otherwise required and the income is under £7,500 (or £3,750 each if shared), no return is needed for that income.

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More answers

• How does the UK Rent a Room scheme work?
• How does the £1,000 property income allowance work?