Tax Tip Week 22 – Rent-a-Room Scheme
You can earn up to £4,250 each tax year by letting a room in your house without paying tax. That's a saving of £1,700 each year for higher rate tax payers.
The Rent-a-Room Scheme was introduced by HMRC in 1995 and the current tax exemption ceiling of £4,250 was set in 1997.
The scheme is only applicable to individuals, not businesses; and certain conditions have to be met for an individual to qualify.
Please see our guidance in How to Run a Limited Company for Professional Contractors and Freelancers - Rent-a-Room Scheme .