Glossary · UK
What is Rent a Room Scheme?
Lets owner-occupiers earn up to £7,500 a year tax-free by letting a furnished room.
Full Definition
The Rent a Room Scheme allows owner-occupiers and tenants in the UK to receive up to £7,500 per tax year (£3,750 if jointly let) of gross rent from a lodger in their only or main residence tax-free, without filing a Self Assessment return for that income. The room must be furnished and the property must be your home. Above £7,500 you must report the rental income but can still claim the £7,500 allowance against expenses instead of itemising. The scheme is not available alongside the Property Allowance for the same property, and Airbnb-style whole-property lets where you live elsewhere do not qualify.
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Disclaimer: Definitions are for guidance only. For decisions about your tax, savings, property or pension situation, always consult a qualified professional or refer to gov.uk.