Rent A Room Scheme UK
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- Опубліковано 25 жов 2021
- If you are looking for a new property tax specialist or international tax advisor then please visit the website of Optimise Accountants: www.optimiseaccountants.co.uk/
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Read our article on £7,500 tax free property income - HMRC and the Rent A Room Scheme www.optimiseaccountants.co.uk...
In this video you will learn about
- What is the £7,500 rent a room allowance from HMRC
- How do you show the £7,500 rent a room allowance that is tax-free on your UK self-assessment tax return
- Do you need to pay any income tax on the money earned
Read our article on £7,500 tax free property income - HMRC and the Rent A Room Scheme www.optimiseaccountants.co.uk/knwbase/uk-tax-resident-landlords/
Please ensure that you register for our free UK tax saving seminars: www.optimiseaccountants.co.uk/tax-seminars/
On the 'costs to deliver the room', are things like mortgage payments, council tax, utility bills, cost of furnishing the room within scope?
it is worth reading this article here www.optimiseaccountants.co.uk/knwbase/how-much-property-tax-does-a-landlord-pay/
Are you able to section part of the house off? for example have a door that is locked, meaning lodger(s) stay on one side the property? also does rent a room apply with airbnb lets?
You certainly can do that but you lose the Rent a Room Scheme benefit as it is no longer a room in your home. However, this is a great way to make more money 💰
Hi, if you're going to use the goverment rent a room scheme do you have to declare anything to the government before doing so? Or can the income just start coming through? Thanks!
You only need to report the income from the rent a room scheme if it is over £7500
Do you have to draw up renting terms and conditions contract... WHAT IF u wish the person to leave.. Do they have legal rights to stay put
Yes to all those questions. Get a membership to the NRLA for support
No a contract is not necessary e.g. if ur renting to family and yes, an annexe can be part of the main property if there's no separate council tax on it. It is not a legal requirement to have a contract on a rental property but strongly advised to have one.
If I choose to opt out of the rent a room scheme, can I deduct all heating bills etc? If I live with one lodger and utility bills come to £1000 for the year, can I deduct the full £1000 as an expense? Or can I only deduct half of the utility expenses because I am sharing the cost with the lodger, and only half of it is technically an expense against the income?
You would have to apportion the utilities by the number of bedrooms. Most often the £7,500 allowance is best
Hello, can I still declare the income from the rent a room scheme even if it is below £7,500? So say I earned £7,000 from this scheme, could I still declare it on my tax return in order to boost my income? With future mortgage applications in mind. Thanks!
The £7,500 will not show up on your tax return as income because you get the credit
@@Simon-Misiewicz-US-UK-Taxes That's great, thanks for clearing that up.
❤
Thank you 🙏
i dont know if any one can anwser this or not but say i buy a ressendital property can i still do this scheme or do i have to get a buy to let mortagage ?
Hi Jonathan
The Rent a room scheme is renting space in your home rather than a buy to let
Can i just choose my tennant, for example my firend and they pay me £625 per month and they live in my house and i dont need to declare anything?
They pay you £525 to live in your house. Do you live in the house as well? If so you benefit from rent a room allowance £7,500 before you pay tax
www.gov.uk/government/publications/rent-a-room-for-traders-hs223-self-assessment-helpsheet/hs223-rent-a-room-scheme-2023
What if you are working and you are paying income tax as you earn over the 12500 allowance
Is this 7500 tax free rental allowance separate to your income tax allowance
Thank you for your help
The £7500 is indeed tax-free irrespective of how much you earn as a basic rate taxpayer as you have specified
@@Simon-Misiewicz-US-UK-Taxes
Thank you
You are welcome 🙏
Can I rent a room on my flat and live in living room ?
Don’t see why not
I am living in a council home that I rent from the council. I am currently receiving universal credit. My Is it still possible to opt in to the scheme?
I do not see why this is not possible
Wow thank you.
You are welcome 🙏
Hi there, I have a 1 bedroom flat and often have to travel for work. Would this apply if I rented out the one bedroom for the time away (as long as youre within the £7500 limit, of course).
The rent a room allowance it’s only provided if you live in the property at the same time. However, if you rent at your property and make less than £1000 profit you do not need to pay tax on it
Isn't the correct terminology as follows - A landlord "Lets Out" and a tenant "Rents" ? A Landlord doesn't "rent out" but "lets out".
You will certainly be welcome to pick this up with HMRC to correct their grammar
This is from Cambridge dictionary:
to pay or receive a fixed amount of money for the use of a room, house, car, television, etc.:
I rented a car from a garage so that I could get about.
[ + two objects ] The old lady rented me her spare bedroom for £200 a week.
My Dad has a villa that he rents (out) to tourists.
Maybe hold off that call to HMRC 😄
@@Simon-Misiewicz-US-UK-Taxes Where does "to Let" come into the picture. E.g. Estate agents board "property to let" ?
I rented a car from the garage ...... correct
The old lady rented me.......correct (the object is me)
My Dad has a villa that he rents out to tourists........ Incorrect
My Dad has a villa that he lets out to tourists..... correct
You will need to take this up with the writers of the Cambridge dictionary. They are far more educated than I, in reference to the English language.
does how much my job earn come into it or is just how much i earn from renting?, so if i rent out at £625 and earn £7,500, how much i earn would still mean i get £7500 tax free?
£7500 is tax-free irrespective of how much you earn. It is nice to give good news just before the weekend
Hi thanks for the response
What if I rent out 2 rooms, let's say for £5000 each room which would be 10,000 income for the 2 rooms in a year would it be tax free as each room income was less than £7500 or because the overall income for the 2 rooms is over 7,500 would i need to complete a tax return?
The maximum allowance is £7500. Please note the tax incentive is called rent a room allowance not multiple rooms.
so if i did rent out 2 rooms for £7,500 a year would i have to complete a tax return or not?@@Simon-Misiewicz-US-UK-Taxes