The Rent a Room Scheme

https://www.gov.uk/rent-room-in-your-home/the-rent-a-room-scheme

The Rent a Room Scheme lets you earn up to a threshold of £7,500 per year tax-free from letting out furnished accommodation in your home. This is halved if you share the income with your partner or someone else.

You can let out as much of your home as you want.

How it works

The tax exemption is automatic if you earn less than £7,500. This means you do not need to do anything.

If you earn more than this you must complete a tax return.

You can then opt into the scheme and claim your tax-free allowance. You do this on your tax return.

You can choose not to opt into the scheme and instead record your income and expenses on the property pages of your tax return.

More information

Read the Rent a Room helpsheet for more detailed information on how to complete the form, and when it makes sense to opt out of the scheme.

Eligibility

You can opt in to the scheme at any time if:

  • you’re a resident landlord, whether or not you own your home

  • you run a bed and breakfast or a guest house

You cannot use the scheme for homes converted into separate flats.