Wednesday, February 25, 2009

Can I rent a room in my house and not pay any tax?

A question I get asked quite often is "Do I have to pay tax on income I get for renting a room in my property?"

Under the rent-a-room scheme, you can rent out a room in your home and provided you earn no more than £4,250 from this, then the income is tax-free.

To claim the relief, you must occupy your home during the period that the room is let and the room must be an integral part of your home, not a separate dwelling.

If the rent exceeds the £4,250 annual limit, you can either pay tax on the excess, or prepare a detailed statement of rent received less relevant expenses (such as the extra costs of heat, light and shared facilities) and pay tax on that excess.

If you would like more information on this please contact me.

Are you paying Too Much Tax? Contact the Tax Reduction Specialists now!

No comments: