New Rent-A-Room Rules

HMRC have now proposed new legislation to limit the circumstances in which rent a room relief can be claimed. This article explains when and how the new restrictive rules will apply.

To explain, rent a room relief allows a person to rent all or part of their home to a lodger and they can receive tax free up to £7,500 (split 50/50 if the property is owned jointly) per tax year.

The issue with HMRC is that people are letting their homes whilst being temporarily absent (let’s say for example where the property is near a sporting venue such as Wimbledon). HMRC says that this is not the purpose of rent a room relief and is aimed at people who take on lodgers.

The new legislation changes with effect from 6 April 2019 and it can only be claimed in respect of periods where occupation of the property as “sleeping” accommodation overlaps with the letting period. This means that this relief should still be available to “Airbnb’s” type letting as long as the owner stays in the home some of the time when the tenant is in occupation.

If the rent a room relief is no longer available to you, then it is possible to claim the property allowance which is a maximum £1,000 tax free allowance.

It is worth noting that although the legislation was subject to consultation, this period ended on 31 August 2018 and details of the final bill will be published in the 2019 Finance Bill (due December 2018).

If we can assist further with this aspect of your personal tax affairs, please contact Vicky Evans at Babcock Tax & Accountancy Services Ltd.  


If you would like our help to understand the implications in more detail for your specific situation, call us today on 02394 003600 or click on the ‘Request Call Back’ button below and we will be happy to have a chat.

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