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Rent a Room Relief

Does Rent a Room relief only apply to letting one room, even if 2 rooms are let, and the combined rents both fall below the income threshold?

And what is the current threshold?

Thanks

Jenni Frost

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Two rooms OK.
RAR relief applies to any number of rooms, provided they are all in your own home and are not part of some separate section of your accomodation, such as a granny flat. You can earn up to £4,250 per annum (£2,125 each for a couple), there being no tax to pay, and all you need to do is tick the relevant box on the property page of your tax return(s).

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OK to charge Electric etc
Jenni,
The RAR relief applies to all rental income, there being no deductions available for the cost of the utility bills, food and so forth. The income for any electricity, water, food etc would be just a part of the rent, and so part of the £4,250. We have ourselves taken advantage of the RAR scheme over the last few years by letting one of our spare rooms to students in our nearby college. We simply included all the cost of electric, water etc in the level of rent.

There is an opt out of this scheme, whereby costs of the RAR are deductible, such as food, electric etc, but the income is taxable. I cannot see what advantage that has, unless the income were to go over the £4,250.

It's a good scheme, and, in my opinion, well worth it. And to simply have to tick a box on my tax return is a bonus!!!

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Rent a Room Relief
Lovely stuff John, that's great. Thank you!

Another question, while I'm here: If a landlord were to charge say £40 a week rent, and then ask for a proportion of the Electric, etc, bills when they came in, is the money for the bills income? Or not, as it is just paying for a utility that has been used?
I suppose what I am asking there is whether income and expenses for letting works the same way and same rules as for self employment?

Thanks :o)

Jenni

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