HMRC, expenses

Posted by Admin - 31/05/2016


If you have one or more lodgers living in your home you will be eligible to use the HMRC Rent a Room Scheme.

To qualify for the HMRC Rent a Room Scheme you must have at least one lodger paying to live in your home and their living quarters must not have a separate front door, kitchen and other facilities.

This scheme entitles homeowners to a flat deduction of £7,500 per year against their rental income which ultimately means if your income from your lodger is £7,500 or less you have no taxable rental earnings.

If you do choose to opt into this scheme you do not necessarily need to keep a record of expenses incurred from having a lodger and you may not even need to fill in a tax return, as long as your receipts are below the tax free thresholds for the scheme.

The tax privilege is automatic therefore if your receipts are above the threshold you will need to complete the property pages of your tax return.

As a resident landlord you are solely responsible for keeping the property safe and in working order.  Your tenant/lodger will not have the right to challenge the agreed rental amount.  You can also give less notice to end the tenancy than if you were letting out the whole property.