Recently there has been a lot of discussion in the mainstream media about the explosion of homeowners and renters making available a room in their property for holiday accommodation websites. Some of the discussions were quite negative, such as noisy guests waking up the neighbours, all night parties which would make some of the scenes in Bad Neighbours angelic and a room with no carpet left in it after the guests had left (don’t even ask me how that happened!?)
So, with all the negative press you might ask yourself are there any positives?
Yes, possible tax free income!
HMRC allow people to use a scheme called Rent A Room Allowance. This is where you would rent out a room or rooms within your property to lodgers or holiday makers.
If the income you make from this nice little business is under £7,500 a year, then it is possible for you to have this income as totally tax free. That’s right, no tax to pay!
So, if you manage to get some nice tenants who clean up after themselves and you make £7,500 in a tax year from your rent a room business, then put your feet up and think about what you are going to do with this tax saving.
Interested in finding out more? Why not pick up the phone and speak to an AIMS Accountant.
We are business accountants for business people. Find your local AIMS Accountant.